What counts as savings for Universal Credit
DWP calls it capital, not savings. The principle is the same: any money or assets you could convert to cash counts, unless the rules specifically exclude it.
Cash savings accounts, current account balances, cash ISAs, stocks and shares ISAs, Premium Bonds, shares, unit trusts, bonds and other investments all count. A second property that is not your main home also counts, using a market valuation.
Lump sums count from the day they arrive. An inheritance, a redundancy payment, a compensation settlement, a lottery win, a bonus payment: all become capital the moment they land in your account.
What does NOT count as savings for benefits
Your main home is fully disregarded. It does not matter how much it is worth or how much equity you have in it.
Personal possessions are disregarded. Furniture, cars, jewellery and household goods are not counted as capital regardless of value.
Money held in an approved pension fund is disregarded. This applies to workplace pensions, personal pensions and SIPPs. The value of the pension fund does not affect UC.
A life insurance policy that has not been surrendered is disregarded. The policy only counts if you cash it in.
Items that are sometimes disregarded
Personal injury compensation is disregarded for 12 months from receipt. If you received £50,000 in compensation for an injury and have kept £30,000 of it after 12 months, the £30,000 counts as capital from that point.
Money from the sale of your main home is disregarded while you are in the process of buying or building a new one. If you have sold your home and are temporarily renting while you buy again, the sale proceeds can be disregarded during that transition.
Business assets are disregarded for self-employed claimants if they are part of the business and being used to generate income. Stock, tools and equipment used in your business are not counted as personal capital.
Second properties and land
If you own a property other than your main home, its value counts as capital. DWP uses a market value estimate, usually based on what the property would sell for if it were on the market.
Any mortgage or charge on the property is deducted from the valuation. So if a second property is worth £100,000 with a £90,000 mortgage, only £10,000 counts as capital.
If you cannot sell the property because a dispute or legal issue prevents it, you can ask DWP to temporarily disregard it. The disregard is not automatic and requires evidence.
Joint accounts and trust funds
A joint savings account is usually split 50:50 between the two account holders for benefits purposes. If you can show that one person has a larger beneficial share, for example because only one person contributed the money, DWP may accept a different split.
Money held in a trust is treated depending on whether you can access it. If you are a beneficiary of a trust and cannot access the capital, it may not be counted. If you have the right to demand payment, it usually is counted.
Child trust funds and Junior ISAs belong to the child, not the parent. They do not count as the parent's capital for benefits purposes.