What Happens to Universal Credit If Your Savings Go Over £6,000?
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.
What happens at £6,000
Nothing changes at the moment savings hit £6,000 exactly. The tariff income rule applies to any amount above the threshold, and a part band counts as a full £250 band. So at £6,001 there is already one band: DWP adds £4.35 to your assumed monthly income, and that reduces your UC award by £4.35. The next £4.35 starts at £6,250.01.
How the reduction grows as savings increase
Each additional £250 (or part of £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.
When does UC stop entirely?
UC stops when total capital goes over £16,000. This applies to combined savings for couples. At £16,000 you still receive (reduced) UC. Above £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.
What you must do: report the change
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.
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Universal Credit savings limit calculator 2026/27 UK
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 2026/27 UK
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.
Related guides
How Much Savings Can You Have on Universal Credit? 2026/27
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. Over £16,000, UC stops entirely. Full 2026/27 rules explained.
Universal Credit Tariff Income Explained | £4.35 per £250 Rule
UC tariff income adds £4.35 per month for every £250 (or part of £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.
How Much Savings Can You Have on Universal Credit? 2026/27 Rules
Savings rules for UK benefits 2026/27: UC ignores savings below £6,000. Between £6,000 and £16,000 your award is reduced by £4.35/month per £250 over the threshold. Over £16,000, UC stops. Pension Credit uses a more lenient £10,000 disregard. PIP and Child Benefit are unaffected by savings.
Independent guide only. Written using published 2026/27 DWP and HMRC figures. This is not an official DWP or HMRC tool and does not constitute an entitlement decision. Figures shown are illustrative: actual awards depend on individual circumstances. For case-specific guidance, contact Citizens Advice or a welfare-rights adviser. Methodology · Editorial standards