DWP could stop your universal credit if you have this amount in savings
The Department for Work and Pensions will start withdrawing support and are going to be checks to ensure people are not cheating the welfare system
Universal Credit claimants are being warned that the Department for Work and Pensions (DWP) could withdraw benefits from those with a certain amount of savings
(Image: John Myers )
Universal Credit claimants are being warned that the Department for Work and Pensions (DWP) could withdraw benefits from those with a certain amount of savings.
To qualify for DWP benefits, individuals typically must not possess more than £16,000 in savings or investments and new measures are being introduced to prevent system abuse. The Secretary of State for Work and Pensions, Liz Kendall, has said: "We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers' money."
She further warned of tougher repercussions for those defrauding the system: "This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence."
Kendall also highlighted the introduction of new safeguards: "Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely." F or money-saving tips, sign up to our Money newsletter here .
Government guidelines for Universal Credit stipulate: "To claim Universal Credit, you must usually have no more than £16,000 in money, savings and investments as a single claimant or if you are living with a partner. If you have money, savings and investments between £6,000 and £16,000, your Universal Credit payments will be reduced."
If individuals have more than £6,000, their payments will be reduced incrementally. Payments will be cut by £4.35 for every £250 that a person has between £6,000 and £16,000.
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An additional £4.35 is deducted for any remaining amount that isn't a complete £250.
This is because the DWP assumes that someone can generate a monthly income of £4.35 for every £250 in their bank account.
So if a person has £6,500 in a savings account, £6,000 of it will be disregarded and the remaining £500 will be considered as providing you with a monthly income of £8.70.
This amount is then subtracted from your monthly Universal Credit payment.
If an individual is receiving Jobseekers Allowance or income-related ESA, they will have £1 a week deducted from their benefits for every £250 (or part thereof) in their savings exceeding £6,000. This also applies to income support and housing benefit.
These benefits are typically paid into accounts fortnightly.
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Several key financial changes are happening in May that could impact your wallet. The main changes include the introduction of tax return penalties, NatWest's takeover of Sainsburys bank, and inflation updates.
Premium bond winners have already been announced and HMRC has begun charging people a daily rate for submitting tax returns late.
Ofgem is also set to announce the new energy Price Cap figures for the next three months meaning the cost of energy bills might finally be able to come down. You can read more about this month's changes here.
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