How savings affect your benefits

If you’re saving money, it’s important to remember that the amount you save can affect the benefits you can claim. This won’t happen until you’ve saved quite a lot, but it’s worth knowing the rules. 

Which benefits can be affected?

If you receive any of these benefits, the amount you can save before they are affected is the same:  

  • Income Support 
  • Income based Job Seekers Allowance (JSA)
  • Income based Employment and Support Allowance (ESA)
  • Universal Credit
  • Housing Benefit 
  • Council tax support

If you’re under pension age, the first £6,000 of your savings and investments is not taken into account when calculating these benefits. That means that if you’ve got savings of up to £6,000, your benefits won’t be affected. If you’re in a residential home this limit increases to £10,000.

If you have more than £16,000 saved you will not be entitled to any of these benefits. If you have between £6,000 and £16,000 every £250 saved above £6,000 is treated as £1 income per week. So your benefits will reduce according to this extra income amount.

Disability Living Allowance (DLA) and Personal Independence Payments (PIP) are not means tested so they’re not affected by any other income or savings.

For more information on how savings and investments are valued contact the Department for Work and Pensions or the Citizens Advice Bureau.