By Mencap
How your savings can impact your benefits
In this brief guide, we break down what 'means-tested' benefits are, what limits apply to your savings, and what you need to do if your financial Financial means anything that is to do with money. It is used to describe how people, businesses, or governments get money and how they use it situation changes.
On this page we've included a video explaining about benefits and savings as well as information that breaks down the core rules.
Watch the video
Your benefits can be affected by how much you have in savings. It is important to inform the Department for Work and Pensions The Department for Work and Pensions is sometimes called the DWP. It is part of the government and manages payments and benefits like Universal Credit, Personal Independence Payment, Employment and Support Allowance, and Income Support. ( DWP DWP stands for the government Department for Work and Pensions. ) if you have a change in your income Income is all the money you get from things like paid jobs and government benefits. .
Reporting changes to your capital
Whenever you claim benefits, you are legally required to report any changes to your income or capital. 'Capital' refers to the total amount of money you hold in savings accounts, investments, or other financial assets.
If you are receiving means-tested benefits - such as Universal Credit or Housing Benefit, the amount of money you have saved directly affects how much support you are entitled to receive.
Understanding the savings limits
The benefits system uses specific limits to determine how your savings impact your payments:
The lower limit (£6,000): If your savings are below £6,000, your benefits will usually not be affected. However, if your savings cross over £6,000, it is vital to contact the Department for Work and Pensions (DWP) to notify them.
The upper limit (£16,000): If your savings exceed £16,000, you will generally no longer be eligible to receive means-tested benefits like Universal Credit.
Note: These limits can sometimes vary depending on the specific mix of benefits you claim, so always keep an eye out for updates.
Why it’s crucial to report your savings
Keeping the Department for Work and Pensions informed about your savings ensures that you are claiming the correct amount of benefits. Failing to report a change could result in being overpaid, which means you may have to pay money back later, or face potential penalties.
Need more support?
If you are unsure how these savings limits apply to your personal situation or need help communicating with the DWP, you don't have to figure it out alone.
You can reach out to the Learning Disability Helpline for guidance Guidance means being given clear instructions to be able to do something well. , and an advisor can talk you through the entire process step-by-step.
The Learning Disability Helpline
Our free helpline service A service gives people what they need, like healthcare services that help people when they are ill, and support services that give people support. offers advice and support for people with a learning disability A learning disability is to do with the way someone's brain works. It makes it harder for someone to learn, understand or do things. , and their families and carers.