- Yes. It is your money. The law says you have not deprived yourself of capital if you use it to pay off or reduce a debt, or to buy goods or services where the cost was reasonable in your circumstances.1
- The risk is spending or giving money away where a significant reason was to get Universal Credit or more of it. DWP can then treat you as still having it, which is called notional capital.12
- Keep receipts. It is up to you to show the money has gone, and the evidence of what it was spent on is what DWP looks at.2
The rule: regulation 50 of the Universal Credit Regulations
Regulation 50(1): you are treated as having capital you deprived yourself of “for the purpose of securing entitlement to universal credit or to an increased amount of universal credit”.1
Regulation 50(2): you are not treated as depriving yourself if you dispose of it to reduce or pay a debt you owe, or to buy goods or services “if the expenditure was reasonable in the circumstances of the person's case”.1
DWP's guide says getting UC need not be your main purpose, but it must be a significant one, and DWP has to show it. It looks at whether you knew savings affect UC, how close the spending was to your claim or a change, and what you planned to live on afterwards.2
Paying for necessities such as food and fuel, paying debts, or repaying a DWP overpayment are treated as having no choice, so they are not deprivation.2
Car, holiday, mortgage, debts: the common cases
Paying off a mortgage, credit card or loan: reducing or paying a debt you owe is not deprivation.1
Buying a car: goods are fine if the cost was reasonable in your circumstances. DWP's own example of spending that is not reasonable is a single person buying a second car with no reason to need two.12
A holiday or other big spend: there is no list of banned purchases. DWP's guide says spending capital “extravagantly or imprudently” is a choice, and it then decides whether getting UC was a significant reason.2
Giving money to family: giving capital away is also a choice, so DWP looks at why and when. Its example is a woman who gave her house to her daughters; DWP decided a significant purpose was to get UC.2
Reporting: tell DWP about changes in your savings as soon as they happen, through your UC account.3
Worked example: paying off a debt
A single person aged 25 or over pays £550 a month rent and has £14,000 in savings. They use £8,000 to clear a credit card.
| Universal Credit with £14,000 saved | £835.70 a month |
| Savings after paying the debt | £6,000 |
| Universal Credit with £6,000 saved | £974.90 a month |
| Monthly increase | £139.20 |
Paying a debt is not deprivation, so UC goes up by the tariff income that the £8,000 was costing.14
Worked example: if DWP decides you deprived yourself
The same person gives away all £12,000 of their savings just before claiming, and DWP decides a significant purpose was to get UC. It treats them as still having £12,000.1
| Universal Credit with no savings | £974.90 a month |
| Notional capital | £12,000 |
| Tariff income on the notional capital | £104.40 a month |
| Universal Credit paid | £870.50 a month |
| Notional capital in the next assessment period | £11,895.60 |
| Tariff income in the next assessment period | £104.40 a month |
Notional capital is not permanent. Each assessment period it goes down by the tariff income it was treated as producing, or, above £16,000, by the UC you would otherwise have got.1 At £104.40 a month the £12,000 falls slowly, which is why giving money away rarely pays.
Common mistakes
Thinking any spending is safe if the money is gone. You must show where it went.2
Thinking spending is never allowed. Debts and reasonable purchases are protected by law.1
Moving money to a partner. On a joint claim your partner's money counts as yours anyway.3
Not reporting the change. If your savings fall, report it: your UC can go up from that assessment period.3
See what your savings do to UC with the savings calculator →
Universal Credit savings limit calculator 2026/27 UK (free)