- Savings that legally belong to your child do not count as your capital for Universal Credit. That covers Junior ISAs, Child Trust Funds and accounts held in the child's own name.2
- The test is legal ownership and access. If you cannot get at the money because it belongs to the child, it stays out of your capital assessment.2
- Money you keep in your own name but think of as 'for the kids' is still your capital, because you can access it, and it counts towards the £6,000 and £16,000 thresholds.2
- Your UC capital rules only bite above £6,000, where each complete £250 adds £4.35 a month of tariff income, and stop UC entirely at £16,000.2
- Child Benefit and the UC child element of £303.94 a month per child are not affected by how much a child has saved.1
Why children's own savings are ignored
Universal Credit assesses the capital of you and your partner, not your children.2 A pot that legally belongs to your child is not yours to spend, so DWP does not add it to your figure. This is why a child can hold a healthy Junior ISA while the family still receives full UC.
The principle is ownership, not the label on the account or what you intend the money for. If the account is genuinely the child's, and you cannot withdraw it for your own use, it is disregarded.
Junior ISAs and Child Trust Funds
Junior ISAs and Child Trust Funds are locked until the child turns 18. Apart from very narrow exceptions such as terminal illness, no one can withdraw the money before then, not even you as the parent. Because the funds are out of your reach, they are not part of your capital assessment.2
That makes these accounts a genuinely useful way for a family on UC to build up something for a child's future without a penny of it reducing the monthly award. Grandparents can pay in too, and it still does not touch your UC.
The trap: saving for a child in your own name
This is where families get caught out. If you open an ordinary savings account in your own name and quietly earmark it 'for the children', DWP counts it as your capital, because legally it is yours and you can spend it whenever you like.2 Your good intentions do not change who owns it.
If you have been doing this, the money you set aside sits in your capital total alongside your other savings. Combined with everything else, it can tip you over £6,000 and start reducing your UC, or over £16,000 and stop it. The fix is usually to move genuine children's savings into an account that is legally theirs, such as a Junior ISA or a designated child's savings account where the child is the account holder.
Worked example: money held in the parent's name
Say you have £4,000 of your own savings and another £3,000 sitting in your name that you have always meant for the children. UC counts the whole £7,000 as yours:
| Your own savings | £4,000 |
| Savings held in your name 'for the children' | £3,000 |
| Capital counted for UC | £7,000 |
| Amount above the £6,000 floor | £1,000 |
| Tariff income (4 complete £250 bands x £4.35) | £17.40 |
That £3,000 knocks £17.40 a month off your UC purely because it is in the wrong name. Move it into a Junior ISA or an account that is legally the child's and, provided it is a genuine gift you cannot claw back, it drops out of your capital. Do not do this the week before a claim or review, though, or DWP may look at it as deprivation of capital.
Child Benefit and the child element are untouched
None of this affects Child Benefit, which is not means-tested on savings at all. It stays at £27.05 a week for the eldest or only child and £17.90 for each additional child no matter how much anyone has saved.
The same goes for the Universal Credit child element of £303.94 a month per child.1 Since the two-child limit was removed on 6 April 2026, every dependent child generates that element, and a child's own savings have no bearing on it. Means-testing on capital looks at the adults' money, not the children's.