Universal Credit capital disregards explained
UC capital disregards explained 2026/27: which assets count, what is ignored, and how the £6,000 and £16,000 savings thresholds affect your award.
What 'capital' means in Universal Credit
In Universal Credit, 'capital' means money and assets that could be converted into cash. That includes savings accounts, current account balances, cash, ISAs, Premium Bonds, investments and shares. It does not include your main home — that is fully disregarded regardless of value.
The DWP adds up everything that counts as capital to produce a total figure. That total then determines whether and how much your UC award is reduced. The rules are the same regardless of whether the capital is held by you or your partner.
The lower disregard: below £6,000 is ignored entirely
If your total capital is below £6,000, Universal Credit ignores it completely. You do not need to declare it on your award or worry about it reducing your payments. This lower threshold is sometimes called the 'lower capital disregard' and it applies in 2026/27 as it has since UC launched.
Assets that are disregarded in full regardless of the amount include: your main home and any property you are taking steps to sell, personal possessions, the surrender value of a life insurance policy, business assets if you are self-employed, and money received as a compensation payment that has been disregarded for 12 months.
Between £6,000 and £16,000: tariff income reduces your award
Once capital goes above £6,000, UC applies a 'tariff income' calculation. For every complete £250 above the £6,000 threshold, the system assumes you receive £4.35 of monthly income. This assumed income reduces your UC award even if the capital earns nothing.
Example: savings of £9,500 means £3,500 above £6,000 — that is fourteen complete £250 bands, producing £60.90 of assumed monthly income. Your UC award is reduced by that £60.90 whether or not the savings actually generate any interest.
This is sometimes called the 'upper capital disregard zone' or 'tariff income zone'. The rate has not changed since UC launched: it remains £4.35 per £250 band.
At £16,000 and above: no UC entitlement
If total capital reaches £16,000 or more, you are not entitled to Universal Credit at all. This is the hard upper capital limit, sometimes called the 'upper capital disregard'. It does not matter how low your income is or how high your rent is — if combined capital exceeds £16,000, a UC claim returns nil.
Capital can fluctuate, so if savings drop below £16,000 again, entitlement can resume. A change of circumstances should be reported to DWP.
Capital disregards and Pension Credit — a different set of rules
Pension Credit uses different capital rules. There is no upper capital limit equivalent to UC's £16,000 stop-point. Savings under £10,000 are fully disregarded. Above £10,000 a similar tariff income approach applies, but the thresholds and rates differ. The UC capital disregard rules described here apply to working-age claimants only.