DWP could stop your universal credit if you have this amount in savings
DWP could stop your universal credit if you have this amount in savings
The Department for Work and Pensions will start withdrawing support and are going to be checks to ensure people are not cheating the welfare system
Universal Credit claimants are being warned that the Department for Work and Pensions (DWP) could withdraw benefits from those with a certain amount of savings
(Image: John Myers )
Universal Credit claimants are being warned that the Department for Work and Pensions (DWP) could withdraw benefits from those with a certain amount of savings.
To qualify for DWP benefits, individuals typically must not possess more than £16,000 in savings or investments and new measures are being introduced to prevent system abuse. The Secretary of State for Work and Pensions, Liz Kendall, has said: "We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers' money."
She further warned of tougher repercussions for those defrauding the system: "This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence."
Kendall also highlighted the introduction of new safeguards: "Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely." F or money-saving tips, sign up to our Money newsletter here .
Government guidelines for Universal Credit stipulate: "To claim Universal Credit, you must usually have no more than £16,000 in money, savings and investments as a single claimant or if you are living with a partner. If you have money, savings and investments between £6,000 and £16,000, your Universal Credit payments will be reduced."
If individuals have more than £6,000, their payments will be reduced incrementally. Payments will be cut by £4.35 for every £250 that a person has between £6,000 and £16,000.
Article continues below
An additional £4.35 is deducted for any remaining amount that isn't a complete £250.
This is because the DWP assumes that someone can generate a monthly income of £4.35 for every £250 in their bank account.
So if a person has £6,500 in a savings account, £6,000 of it will be disregarded and the remaining £500 will be considered as providing you with a monthly income of £8.70.
This amount is then subtracted from your monthly Universal Credit payment.
If an individual is receiving Jobseekers Allowance or income-related ESA, they will have £1 a week deducted from their benefits for every £250 (or part thereof) in their savings exceeding £6,000. This also applies to income support and housing benefit.
These benefits are typically paid into accounts fortnightly.
Article continues below
Several key financial changes are happening in May that could impact your wallet. The main changes include the introduction of tax return penalties, NatWest's takeover of Sainsburys bank, and inflation updates.
Premium bond winners have already been announced and HMRC has begun charging people a daily rate for submitting tax returns late.
Ofgem is also set to announce the new energy Price Cap figures for the next three months meaning the cost of energy bills might finally be able to come down. You can read more about this month's changes here.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
12 hours ago
- The Guardian
Pensions report cuts Reeves' planned growth funds from £160bn to £11bn
Plans to invest £160bn of surplus funds from final salary pension schemes to boost the UK economy over the next 10 years have been dealt a blow by a Whitehall assessment that found there was likely to be little more than £11bn available to spend. In a knock to Rachel Reeves's growth agenda, a report by civil servants at the Department for Work and Pensions (DWP) found that the expected surpluses in occupational schemes would be used by businesses to offload their pension liabilities to insurance companies. It could mean that as little as £8.4bn would be available for companies to invest in new equipment or technology, but the figure was likely to be nearer £11bn, the DWP said on Friday. 'It is estimated that an additional £11.2bn surplus will be extracted as a result of the preferred option to legislate over a 10-year period,' the report said. Pension surpluses were a significant pillar of the chancellor's plans to use private sector funds to grow the economy during a period when state funds are likely to be severely restricted. Reeves is expected to lay out her growth plans on Wednesday in the spending review, which will set out the government priorities for the next year. Earlier this year she said about 75% of final salary schemes, also known as defined benefit schemes, were in surplus, worth £160bn, but restrictions have meant businesses have struggled to invest them. In her Mansion House speech in November, Reeves also outlined proposals for pension megafunds to be created from individual defined contribution schemes and a merger of local authority pension schemes to make the pensions industry more cost-effective. A pensions bill going through parliament will allow pension fund trustees to unlock trapped surplus funds that Reeves said would increase investment in British businesses and lift economic growth. Hundreds of final salary schemes, which spent decades in deficit, meaning the value of their obligations to members outweighed their assets, have moved into surplus in recent years after an increase in interest rates. 'Although fewer than 700,000 people are actively saving into a private sector defined benefit scheme, the sector remains a significant market within the UK economic landscape,' the report said. 'Across around 5,000 schemes, around nine million members are being supported with assets of around £1.2tn.' An impact assessment by DWP officials said legislation was needed to overhaul the pension system and give trustees the power to access surplus funds. It said a failure to act would also mean 'an opportunity to benefit members, businesses and to drive economic growth would be missed. Therefore 'do nothing' is not considered a desirable option.' However, a combination of factors means the expected surplus for investment is reduced to no more than £12bn over 10 years, in part because the legislation does not force trustees of defined benefit funds to use surpluses for investment, and that most occupational final salary schemes have reached a level where a buyout is possible. In a note for the Pension Insurance Corporation, an independent expert, John Ralfe, said: 'Forget about £160bn of pension surpluses just waiting, as Rachel Reeves said, to be paid out to 'drive growth and boost working people's pension pots'. 'The DWP figures estimate just a fraction of this – under £12bn – will be paid out over the next 10 years, mainly because most companies want a full buyout with an insurance company. 'And the bill contains no details of how pensions will be protected if cash is withdrawn. Member security must be a priority with strict rules on repaying amounts if funding deteriorates,' he added. Many pension fund trustees are known to be concerned that allowing company boards access to surplus funds could leave their schemes vulnerable after a panic in financial markets. Without strong safeguards, giving businesses access to surplus pension funds could also make them more attractive targets for foreign takeovers. It is understood the new regime will allow trustees to block moves to access surplus funds if they believe it will undermine the safety of the fund. The pensions minister Torsten Bell said: 'I have read the impact assessment, and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.' The Treasury and the DWP were contacted for comment.
Daily Mirror
12 hours ago
- Daily Mirror
State Pension's future under review amid retirement shake-up
The State Pension is facing a dramatic overhaul under a Government shake-up of retirement rules. The changes could see millions of future retirees having to wait longer to claim and receiving different levels of payment. Ministers have launched a wide-ranging review of the entire pension framework – looking at when people should be entitled to receive the state pension, how much they should get, and whether the current system is financially sustainable for the long term. The Department for Work and Pensions (DWP) confirmed that the second phase of its Pensions Review will examine 'the balance of all three pillars of the UK system – state, occupational and personal wealth'. It is expected to ask fundamental questions about how these components should work together to ensure a financially secure retirement for everyone. Full details and the panel leading the review are yet to be published. The review comes at a time of growing concern that the triple-lock guarantee – which ensures the state pension rises every year in line with wages, inflation or 2.5%, whichever is highest – is pushing up pension payments at an unsustainable rate. Rachel Vahey, head of public policy at AJ Bell, said: 'Pensions minister Torsten Bell recently ruled out scrapping the triple-lock guarantee, but as the state pension grows ever closer to the frozen personal allowance threshold it could be that the Government is finally forced to address the question of how much the state pension should really offer, at what age, and how it can increase payments sustainably each year.' The announcement comes hot on the heels of a new Pension Schemes Bill, which lays the groundwork for major changes, including the creation of massive collective investment funds – dubbed 'megafunds' – to deliver better returns for savers. Ms Vahey said the review could be the most significant shake-up since the Turner Review 20 years ago, which brought in automatic workplace pension enrolment and transformed saving habits in the UK. 'It's now 20 years since the Turner Review was published,' she said. 'That comprehensive look at the UK's retirement system ushered in a new regime for pensions, resulting in the introduction of landmark automatic enrolment reforms which changed pension saving in the UK forever.' Those reforms have seen more than 11 million people newly enrolled in workplace pensions since 2012, bringing the total number of active savers to around 20 million. But experts warn that while the number of savers has surged, many still aren't putting enough aside for a comfortable retirement. Ms Vahey said: 'Not enough people are saving enough money for their later life, and although automatic enrolment has gone a long way to create millions of new pension savers, instead of resting on our laurels we now need to take a good look at whether they are saving a sufficient amount of money to realise their retirement ambitions.' The review is also expected to probe the interaction between the state pension and private savings – including personal assets – raising questions about whether those with higher wealth might ultimately be expected to rely less on the state. Ms Vahey added: 'While details of this new Pension Review are thin on the ground at this stage, it has the potential to be as significant and could have far-reaching implications for people saving for their retirement.' Campaigners are urging the Government to set out full terms of the review as soon as possible to give millions of savers clarity on what's coming. Ms Vahey said: 'The Government now needs to clearly set out the terms of this review as soon as possible to give savers and the industry certainty over its plans.'
Scottish Sun
16 hours ago
- Scottish Sun
Hundreds of thousands of Universal Credit claimants to lose nearly £100 a week in Government overhaul
Plus, find out how much Universal Credit you can get NO BENEFIT Hundreds of thousands of Universal Credit claimants to lose nearly £100 a week in Government overhaul HUNDREDS of thousands of people on Universal Credit are set to lose almost £100 per week under Government plans. The Department for Work and Pensions (DWP) previously announced plans to scrap the health component of Universal Credit for under-22s. 1 The Department for Work and Pensions has announced sweeping benefits changes Credit: EPA At the moment, the Limited Capability for Work and Work-Related Activity (LCWRA) element for Universal Credit is applied to most adults aged between 16 to 21 if they're struggling to stay employed due to health issues. But charity Disability Rights UK is now saying the Government plans will affect almost 110,000 disabled adults. It says they will lose nearly £100 a week if the changes come into effect. That equates to almost £400 a month, or £4,800 over the course of a year. The charity says the move will mostly impact disabled young people who are described as NEET - 'Not in Education, Employment or Training' - and are having difficulties getting into the job market. But it will also affect young people who are in work but are in low-paid or part-time jobs and are using Universal Credit to top up their earnings. Disability Rights UK says on its website: "The proposed policy will not just impact young disabled people who are NEET, but also many young disabled people who are in education. "Despite barriers to students claiming UC, it is often possible for those in non-advanced education who have passed the August after their 19th birthday to successfully claim UC as an adult. "Under the current system, low-income families with a disabled 19-year-old already have to contend with a drop in income of at least £29.25 per week when their child stops being treated as a dependent and starts claiming UC in their own right. "However, under the Government's proposal, young disabled people aged under 22 would only receive £73 rather than £170 per week, meaning a much greater drop in household income." I'm on Universal Credit & I don't know how to survive - I even lost £600 because my husband decided to get a job, it's just impossible The Government unveiled a huge benefits shake-up earlier this year as part of plans to save about £5billion a year in welfare payments. Work and Pensions Secretary Liz Kendall said the current system is failing millions with one in 10 working-age Brits now on sickness or disability benefits. She said spending on disability benefits has spiralled by £20billion since the pandemic and pledged to fix the 'broken' system with a reform package. Part of the Government's plans include getting people back into work while protecting the most vulnerable. Research suggests removing access to the health element of Universal Credit for under-22s will not impact 73% of 16 to 24-year-old Brits who fall into the NEET category. How much Universal Credit can you get? TRYING to work out how much Universal Credit you can get can be overwhelming. There are so many different elements that can affect your claim and it makes the whole process even more complicated. There are several free calculators that you can use to help you get an estimate, such as Citizen's Advice, MoneySavingExpert, StepChange and Turn2Us. You will need: Details of all your income, such as existing benefits, tax credits, earnings from employment and your pensions, Details of your partner's income if you're married, in a civil partnership or living with someone as a couple. You will be assessed as a couple Information on any savings you have, How much you pay in council tax per year, and whether you get any discounts, reductions or exemptions, Details of your rent or mortgage payments, Employment and income information about anyone else living with you, such as grown-up children, Details about your carer's allowance if you receive it. You'll need to make sure that the information provided is as accurate as possible to get the truest estimate. What other benefits changes have been announced? The Government's proposed benefits shake-up will see a number of changes come into effect. One that has gained lots of attention is a crackdown on eligibility, particularly for those claiming the main disability benefit Personal Independence Payments (PIP). The number of claimants is expected to double by 2030, with the biggest rise among young people and those with mental health conditions. But from 2026, new claimants will need to score at least four points in one category to qualify as part of a plan to curb the rapid rise in payouts. These are some of the other changes planned:
