Once your savings cross £6,000, Universal Credit does not stop, but it does reduce. The mechanism is called tariff income and it works by assuming you receive a small monthly income from your savings, even if you do not. This page explains exactly what happens and by how much.
Nothing changes at the moment savings hit £6,000 exactly. The tariff income rule applies from the first complete £250 above the threshold. So at £6,001 there is no band yet, and tariff income is still zero. At £6,250, there is one complete £250 band, and DWP adds £4.35 to your assumed monthly income. That reduces your UC award by £4.35.
Each additional complete £250 above £6,000 adds another £4.35 per month to the assumed income. Savings of £7,000 (£1,000 over) = four bands = £17.40/month reduction. Savings of £9,000 (£3,000 over) = twelve bands = £52.20/month reduction. Savings of £12,000 (£6,000 over) = 24 bands = £104.40/month reduction. Savings of £15,000 (£9,000 over) = 36 bands = £156.60/month reduction. At savings just under £16,000, the reduction can be close to £170/month.
UC stops when total capital reaches £16,000 or more. This applies to combined savings for couples. At £15,999 you still receive (reduced) UC. At £16,000 the award returns nil. If your savings then fall back below £16,000, you can claim UC again. You will need to make a new claim; UC does not restart automatically.
Going over £6,000 in savings is a change of circumstances you must report to DWP. Do this via your UC journal. DWP will recalculate your award from the point the savings crossed the threshold. Failing to report can create an overpayment that DWP will recover from future payments.
Check how savings affect Universal Credit in 2026/27. See the £6,000 lower limit, £16,000 upper limit and £4.35 per £250 tariff income rule.
Free Universal Credit calculator for 2026/27. Estimate UC from earnings, rent, children and savings, including the £6,000, £16,000 and tariff income rules.
You can have up to £6,000 in savings with no effect on Universal Credit. Between £6,000 and £16,000 your award is reduced by tariff income. At £16,000 or above, UC stops entirely. Full 2026/27 rules explained.
UC tariff income adds £4.35 per month for every complete £250 above £6,000 in savings. Savings of £9,000 = £52.20/month off your UC. Full table from £6,000 to £16,000 and why the £16,000 cliff edge matters.
You can have up to £6,000 in savings with no effect on Universal Credit. Between £6,000 and £16,000 your award is reduced. At £16,000 or above, UC stops. Pension Credit works differently. PIP and Child Benefit are not means-tested.
Independent guide: This scenario explanation uses published GOV.UK rules and thresholds for 2026/27. It is not an official DWP or HMRC tool. Use the calculators linked above to estimate your specific position, and contact Citizens Advice or a welfare-rights adviser for case-specific guidance.