Savings - confused!

Marsha2007

Now my UC claim is sorted, I'm confused about savings. With the larger payment than before this may take me over £6000 savings each month. How does this work? I've seen it says it's not counted as capital until end of assessment period. Do we tell them at the end though how much we've got? How do they know what we have left? Very confused! 

kaMelo

Any income you receive is not classed as capital until the end of the next assessment period.

A simple way to work out what capital to declare. Total up everything you have at the end of an assessment period. Deduct from that total any income(wages, benefits, pension income etc) you have received in that assessment period. Deduct any amounts that qualify to be disregarded, such as CoL payments you still have. 

What you are left with is the amount to declare, if below £6,000 there is nothing to declare.

HillStreetBlues

Capital at the end of your Assessment Period is monies minus  income minus and disregarded capital such as Cost of Living payments if you have kept them   
Example a person with no CoL payments or disregarded capital  who receives £1000 UC payment  and has £6,500 in monies will have £5.5k of capital.
It's the last day of a person's AP that counts.

Marsha2007

I know I'm being a bit thick but just so I understand it. 

On last date of AP, I have (for example) £6500. Minus UC of £1000, Wages £800, ESA £580 and child benefit £102. That leaves £4018 which is classed as capital?

How do they know whether you have spent it though? 

kaMelo

Marsha2007 said:

I know I'm being a bit thick but just so I understand it. 

On last date of AP, I have (for example) £6500. Minus UC of £1000, Wages £800, ESA £580 and child benefit £102. That leaves £4018 which is classed as capital?

If you received those payments within the dates of your assessment period, that is correct.

How do they know whether you have spent it though? 

They don't, there is no need to report whether you've spent the money or not. That will become apparent when you report your capital (if required to do so) at the end of the next assessment period. 
At the end of each assessment period do the calculation as above to work out your capital. If you have less than £6000 in capital there is nothing to declare, if your capital is £6000 or more then you need to report this for each and every assessment period that that is the case.

Just for reference, what constitutes as capital for UC purposes is much more than just cash in the bank.
https://assets.publishing.service.gov.uk/media/65d336b3e1bdec2be1322238/admh1.pdf

peteuk

Marsha2007 said:

I know I'm being a bit thick but just so I understand it. 

On last date of AP, I have (for example) £6500. Minus UC of £1000, Wages £800, ESA £580 and child benefit £102. That leaves £4018 which is classed as capital?

How do they know whether you have spent it though? 

They wont but if you havent the following month your capital would technically be greater. 

For example at the end of your AP 1- youve got £6500. Minus UC of £1000, Wages £800, ESA £580 and child benefit £102. That leaves £4018.  But of the £1582 received you spend £1000,  Then the start point of the next AP will be £4600

End of AP 2 - You've now got £6182 - so minus the £1582 you’ll report £4600. 

Now common sense says this isn’t accurate, for instance if youve £4600 in a savings account and your current account is used to receive your benefits, Then you will use some of those benefits to live off during that assessment period. So it is easier to add up the two balances and then deduct your income, benefits etc 

Marsha2007

Thank you all, I'm not sure I fully understand it, but it makes a little more sense!