The short answer: £6,000 with no effect, £16,000 is the hard limit
Universal Credit lets you hold up to £5,999 in savings without any effect on your award. Once savings reach £6,000, an assumed-income calculation starts reducing your payments. At £16,000 your entitlement ends.
These thresholds apply to the combined capital of a couple, not each person individually. So if you have £3,000 and your partner has £4,000, your household total is £7,000 and the reduction rules apply.
Your main home is not counted as capital. It does not matter what it is worth.
Between £6,000 and £16,000: the tariff income rule
For every complete £250 above the £6,000 threshold, DWP assumes you receive £4.35 of monthly income. This is called tariff income. It reduces your UC award even if the savings earn nothing.
So savings of £8,000 means £2,000 above the threshold. That is eight complete £250 bands. Tariff income: 8 x £4.35 = £34.80 a month off your UC.
Savings of £12,000 means £6,000 above the threshold. That is 24 bands. Tariff income: 24 x £4.35 = £104.40 a month off your UC.
Savings of £15,750 means £9,750 above the threshold. That is 39 bands. Tariff income: 39 x £4.35 = £169.65 a month off your UC. You are still entitled to UC at this level, but only just.
At £16,000: UC stops
Once total capital reaches £16,000, you are not entitled to Universal Credit. The claim returns nil regardless of income, rent or family size.
If savings fluctuate around the threshold, you can reclaim once they drop below £16,000. Report the change to DWP and a new assessment period begins.
DWP can apply a deliberate deprivation rule if they believe savings were spent or transferred specifically to get under the limit. Paying off debts or covering normal living costs is unlikely to be questioned.
What counts as savings for UC purposes
Savings accounts, current account balances, ISAs (cash and stocks and shares), Premium Bonds, shares and investments all count as capital. So does property other than your main home.
Your main home is disregarded entirely. Personal possessions are disregarded. Life insurance policies that have not been cashed in are disregarded. Business assets if you are self-employed may also be disregarded.
Personal injury compensation can be disregarded for up to 12 months from receipt. Money set aside for specific care needs may also be ignored while it is being used for that purpose.
Capital disregards that many people miss
Some money that looks like savings is not counted at all. If you have received a compensation payment following a personal injury, DWP disregards it for 12 months. After that period, any remaining balance is counted.
Money held in an approved pension fund is disregarded. This means pension savings, even large ones, do not affect your Universal Credit.
If you own a property you are actively trying to sell, it may be disregarded for up to 26 weeks while sale proceeds are pending. After that, the full value counts.