UC & Savings and reclaiming when still paying back overpayment

MargeryKempe

Hi there,

We claimed universal credit as a couple from sometime in 2023 to April (ish) this year, 2025. We had to stop claiming as my father gave us a large sum of money towards a house deposit which took us well over the £16,000 threshold for savings. We only realized we had broken the rules a couple of months after he gave us the money, so I am now paying back the overpayment in monthly instalments as well as no longer receiving any benefit payments (apart from child benefit).

it was a total nightmare declaring our new circumstances and trying to stop them from paying us any more money whilst we proved to them that we no longer qualified. I had to go into the job centre with hundreds of printed bank statements, which the job centre employee barely glanced at the front page of each of them. It seems crazy that UC/ DWP don’t allow you to upload bank statements online to prove things. I am lucky that I work part time, and I am able-bodied so I was able to go in and submit the evidence without losing money or leave but it was expensive getting everything printed out.

I am really concerned that if the house we are buying goes through we will not be able to claim UC again as I will be paying off my debt to DWP for a couple of years. Is it possible to reclaim when you still have a UC debt?

if the affordable housing house purchase (shared ownership) thing we are doing goes through our savings will go below the £16000 threshold and our monthly costs will increase by at least £300 per month. I think we will really need the help of UC. If we are allowed to apply again despite the debt I am really concerned about the Savings rules as the amount of UC you get seems very closely dependent on yr amount of savings. I got the impression that you are supposed to report a change on UC every time your savings go up by £200. I save into a locked in savings account £75 a month (I don’t know if I’ll be able to afford to save this much with the new higher outgoings in the new house) and my partner also saves every month, he will be looking to staircase on the affordable housing part-ownership house, or if not, my eldest is 16 and will prob be looking to go to uni in Autumn 2027, so we need to save towards that. If we have to report every change in savings by £200 we would have to report at least once every 3 months. Which means every 3 months having to check the balances of every single one of our many accounts and reporting all of them and then printing taking all the statements into the job centre. Is this really what we are expected to do? It’s like they set these hurdles to stop people from claiming.

what do people think or suggest regarding this? Because my partner and I have separate current accounts (which works for us) we don’t have an eye on each other’s balances so it is really hard to keep track of whether our total amount of money has exceeded one of the thresholds.

I would welcome Martin campaigning to make the general application and reporting of changes a bit easier.

I have to admit I did not know that we were supposed to report change of current account to UC. I reiterate that I am no longer claiming atm. I did a current account switch in Autumn2024 with CASS and didn’t report it (not knowing that I had to, genuinely) , I had absolutely no problems whatsoever. No payments were ever missed/no overpayments /no probs whatsoever. The only time I reported changes were when our rent was increased in Jan this year (2025) and when we realized our savings had gone well over the threshold. I had changes in pay over the 2 years when I claimed but since UC/DWP receive pay information directly from the payroll of your employer it seems like there is no need to report changes like this, since they can see all the info on yr payslips.

I’d really appreciate any comments or knowledge people have.  It was so humiliating having to prove that our total money + savings was too high to continue receiving the benefit. I don’t understand why they can’t just take your word for it and stop paying you the money when you have told them you know your total money amount is too high. Why would anyone lie about that?

thanks for any help and best wishes to all,

Marg

Yamor

Did your father give you the money outright, or would you have to return it to him if you don't spend it on the house deposit?

peteuk

Hindsight is wonderful…

Theres a few things to unpick, for both you and your father.

When it comes to buying the house, I’m guessing the majority of the amount gifted will be used, and so you’ll be back under the £6K or £16k threshold.  So a new claim can be made.  But you’ll still be paying back the overpayment.

lf you don’t buy the house, then you sat with £XK in your bank.  If you then use it to live off then once you get to below £16k you can reapply.

Yamor has already asked if this was a gift or loan.  If you’ve got an agreement with him then instantly paying it back seems logical, but there isn’t an agreement then it may be viewed as DoC then UC will potentially see it as you still have the money, so you wont be able to claim until they calculate your under the £16k threshold.

Hows your father’s health?  If elderly and he has long term illnesses that are likely to mean he may need care in the next few years then by gifting you this sum of money it may go against him.

If he should pass away in the next 7 years then the amount will be seen as part of his estate and a tapering/sliding scale applied depending on when this occurs.  

As for when you claim again, the rules for reporting capital are simple.

You don't report any capital under £6K

Over £6k and under £16K - UC is reduced by £4.35 for every £250.00 over or part of there in.  For example £6,100.00 will attract a reduction of £4.35.  So would £6,240.00. If you then have £6280, then that would mean a deduction of £8.70.

Over £16K and your entitlement to claim stops.

If you’re in the £6K -£16k region, you only need to report when your capital changes (increases and decreases) every £250 threshold.  

If you don’t want to report savings, then don’t claim UC.  It would be that simple. 

As for savings, depending on how they are held depends on how they affect your capital.  So for instance a LISA, where you don’t have access to the funds, you’ll be capital will be classed as having 75% of the total amount, to take into account the withdrawal fees to access it.  So £1K in a LISA, is £750.00 in capital.

Other savings regardless of the reason for them, are classed as capital, if in your or your partners name.  UC doesn’t care if you've got £6K for you sons Uni days, it sees it as you’ve got £6K.  

 I would also add the £6 and £16K are not individual thresholds, this are joint thresholds, as it will be a joint UC claim.

Personally I’m not sure why you would buy affordable housing when it means your monthly outgoings increases by £300 per month.  Especially when you’re paying back a UC overpayment.  Id also question why your father gave you the money so early, in the process.  It’s now December and had he waited you would still be claiming UC and would have avoided the overpayment.

Not aimed at the OP, but for anyone reading this, you really need to understand the benefits you are claiming and how any changes affect this.  It may avoid issues further down the line.

kimwp

You should really take a moment to think about whether you can afford to buy. Houses are expensive, repairs etc and you are saying it will cost an additional £300 a month. 

born_again

MargeryKempe said:

Hi there,

We claimed universal credit as a couple from sometime in 2023 to April (ish) this year, 2025. We had to stop claiming as my father gave us a large sum of money towards a house deposit which took us well over the £16,000 threshold for savings. We only realized we had broken the rules a couple of months after he gave us the money, so I am now paying back the overpayment in monthly instalments as well as no longer receiving any benefit payments (apart from child benefit).

it was a total nightmare declaring our new circumstances and trying to stop them from paying us any more money whilst we proved to them that we no longer qualified. I had to go into the job centre with hundreds of printed bank statements, which the job centre employee barely glanced at the front page of each of them. It seems crazy that UC/ DWP don’t allow you to upload bank statements online to prove things. I am lucky that I work part time, and I am able-bodied so I was able to go in and submit the evidence without losing money or leave but it was expensive getting everything printed out.

I am really concerned that if the house we are buying goes through we will not be able to claim UC again as I will be paying off my debt to DWP for a couple of years. Is it possible to reclaim when you still have a UC debt?

if the affordable housing house purchase (shared ownership) thing we are doing goes through our savings will go below the £16000 threshold and our monthly costs will increase by at least £300 per month. I think we will really need the help of UC. If we are allowed to apply again despite the debt I am really concerned about the Savings rules as the amount of UC you get seems very closely dependent on yr amount of savings. I got the impression that you are supposed to report a change on UC every time your savings go up by £200. I save into a locked in savings account £75 a month (I don’t know if I’ll be able to afford to save this much with the new higher outgoings in the new house) and my partner also saves every month, he will be looking to staircase on the affordable housing part-ownership house, or if not, my eldest is 16 and will prob be looking to go to uni in Autumn 2027, so we need to save towards that. If we have to report every change in savings by £200 we would have to report at least once every 3 months. Which means every 3 months having to check the balances of every single one of our many accounts and reporting all of them and then printing taking all the statements into the job centre. Is this really what we are expected to do? It’s like they set these hurdles to stop people from claiming.

what do people think or suggest regarding this? Because my partner and I have separate current accounts (which works for us) we don’t have an eye on each other’s balances so it is really hard to keep track of whether our total amount of money has exceeded one of the thresholds.

I would welcome Martin campaigning to make the general application and reporting of changes a bit easier.

I have to admit I did not know that we were supposed to report change of current account to UC. I reiterate that I am no longer claiming atm. I did a current account switch in Autumn2024 with CASS and didn’t report it (not knowing that I had to, genuinely) , I had absolutely no problems whatsoever. No payments were ever missed/no overpayments /no probs whatsoever. The only time I reported changes were when our rent was increased in Jan this year (2025) and when we realized our savings had gone well over the threshold. I had changes in pay over the 2 years when I claimed but since UC/DWP receive pay information directly from the payroll of your employer it seems like there is no need to report changes like this, since they can see all the info on yr payslips.

I’d really appreciate any comments or knowledge people have.  It was so humiliating having to prove that our total money + savings was too high to continue receiving the benefit. I don’t understand why they can’t just take your word for it and stop paying you the money when you have told them you know your total money amount is too high. Why would anyone lie about that?

thanks for any help and best wishes to all,

Marg

It is already there. Under repot a change. Which is on the 1st page of your UC account when you sign in.

• Money, savings and investments

  Includes money in your bank account, any current accounts, savings and investments.

Limits are clear when you set up your UC claim, On the Gov website.
As you have a joint claim you need to make sure that one of you keeps tabs on your balances each month.


What you really should have done is asked your father to hold the funds & pay solicitor direct when required, so the money never hit your account.

HillStreetBlues

born_again said:

What you really should have done is asked your father to hold the funds & pay solicitor direct when required, so the money never hit your account.

That is what would have been simpler but that horse has bolted.
It's really important how the father  meant the money to be used. If the sole purpose was for the money to be used for the buying of the property and would have to be returned if property not bought then  it's possible that a Quistclose trust was formed, so that money excluded as capital for UC.  

MargeryKempe

Yamor said:

Did your father give you the money outright, or would you have to return it to him if you don't spend it on the house deposit?

He gave it to us outright. He isn’t expecting it back.

MargeryKempe

Thanks everyone. Yes in hindsight it would have been better for him to not give us the cash until we needed it but when we were assessed for the mortgage it was easier to have the money in my partner’s account rather than declaring the money for the deposit when we didn’t have it yet.

He has given us the money , he is not in ill health and he also gave us extra money to pay for the inheritance tax in case we need it. I realise this is possibly circular, but we have a bit saved that we won’t spend in case we have to pay inheritance tax.

We can just about afford the extra £300 a month because we will have fewer costs as my kids will be able to walk or cycle to their secondary school (we are moving closer to school). The cost of the bus tickets is currently more than £1200 a year. 

If we have money left over from our deposit we will need it to buy appliances and furniture for the new house. Our current rental property has all white goods and the new house won’t have all the white goods and we’ll need some new beds as our beds are from freecycle and collapsing.

I got the impression from some of the posts that you CAN reapply for universal credit even if you are repaying a UC debt. Is that true?

It will be very tricky regarding savings and I have trouble keeping track of our savings/total money as I think I mentioned my partner and I have completely separate bank accounts and we have several of them.

i am managing not to get into debt in my current financial position which I am pleased with. I have been in zero debt since March 2025, except my new debt to universal credit!

my partner has a bit of debt but not too much.

interesting about the LISA too. I don’t know what that is.

thanks

Margery

MargeryKempe

peteuk said:

Hindsight is wonderful…

Theres a few things to unpick, for both you and your father.

When it comes to buying the house, I’m guessing the majority of the amount gifted will be used, and so you’ll be back under the £6K or £16k threshold.  So a new claim can be made.  But you’ll still be paying back the overpayment.

lf you don’t buy the house, then you sat with £XK in your bank.  If you then use it to live off then once you get to below £16k you can reapply.

Yamor has already asked if this was a gift or loan.  If you’ve got an agreement with him then instantly paying it back seems logical, but there isn’t an agreement then it may be viewed as DoC then UC will potentially see it as you still have the money, so you wont be able to claim until they calculate your under the £16k threshold.

Hows your father’s health?  If elderly and he has long term illnesses that are likely to mean he may need care in the next few years then by gifting you this sum of money it may go against him.

If he should pass away in the next 7 years then the amount will be seen as part of his estate and a tapering/sliding scale applied depending on when this occurs.  

As for when you claim again, the rules for reporting capital are simple.

You don't report any capital under £6K

Over £6k and under £16K - UC is reduced by £4.35 for every £250.00 over or part of there in.  For example £6,100.00 will attract a reduction of £4.35.  So would £6,240.00. If you then have £6280, then that would mean a deduction of £8.70.

Over £16K and your entitlement to claim stops.

If you’re in the £6K -£16k region, you only need to report when your capital changes (increases and decreases) every £250 threshold.  

If you don’t want to report savings, then don’t claim UC.  It would be that simple. 

As for savings, depending on how they are held depends on how they affect your capital.  So for instance a LISA, where you don’t have access to the funds, you’ll be capital will be classed as having 75% of the total amount, to take into account the withdrawal fees to access it.  So £1K in a LISA, is £750.00 in capital.

Other savings regardless of the reason for them, are classed as capital, if in your or your partners name.  UC doesn’t care if you've got £6K for you sons Uni days, it sees it as you’ve got £6K.  

 I would also add the £6 and £16K are not individual thresholds, this are joint thresholds, as it will be a joint UC claim.

Personally I’m not sure why you would buy affordable housing when it means your monthly outgoings increases by £300 per month.  Especially when you’re paying back a UC overpayment.  Id also question why your father gave you the money so early, in the process.  It’s now December and had he waited you would still be claiming UC and would have avoided the overpayment.

Not aimed at the OP, but for anyone reading this, you really need to understand the benefits you are claiming and how any changes affect this.  It may avoid issues further down the line.

Oh it sounds like you are saying we could claim as soon as our savings amount goes below the threshold (I wouldn’t claim if we were still close to the threshold but I don’t think we will be). 

I think if the house falls through, which we hope it won’t,  we will keep the money as my partner will not want to temporarily give it back he’ll want to search for another house we can buy.

thanks to all!

marg

MargeryKempe

Oh we can’t have LISAs because we are 50. Hence the need to (partially) buy a house.