Can Universal Credit check my savings account?

If you’re unable to work due to sickness, are unemployed, or on a low income, you may be entitled to Universal Credit.

Universal Credit is a monthly payment designed to help with essential bills. The benefit can be worth up to £334.91 per month — or potentially more if you've children or are disabled.

However, under the eligibility rules, the amount you’re entitled to can change if you have over £6,000 in savings or investments. In this article, we’re going to take a closer look at this rule, and answer the question of whether the Department for Work and Pensions has the power to check your savings account balance.

What is Universal Credit?

Issued by the Department for Work & Pensions (DWP), Universal Credit (UC) is designed to meet basic living costs for those who are sick, off work, or on low income.

The benefit was introduced by the current Conservative Government and is designed to replace all other benefits, such as Income support, Income-based jobseeker's allowance, Housing benefit, Child tax credit, and Working tax credit.

If you’re currently claiming any of these legacy benefits, you can voluntarily move over to the UC system if you wish. It almost goes without saying but there’s little point in voluntarily moving over unless it would make you financially better off. If you’re unsure about whether UC will be more generous than the current benefits you receive, you may wish to speak with Citizen's Advice who can put you in touch with a personal adviser.

It’s worth knowing that if you’re claiming a legacy benefit and you have a change of circumstances, such as a new job, then you may be automatically moved over to UC.

The Government plans to move over all legacy benefit claimants to UC by 2029 at the latest.

Who can claim Universal Credit?

If you’re aged 18 or over (but under the state pension age), live in the UK, are unemployed, or have a low income, then you may qualify for UC.

The amount you can claim will depend on your circumstances and if you’ve children, or are disabled, then you may be able to claim a top-up above the basic amount.

To find out how much you can claim, plus further information about UC, take a look at the Gov.UK website. It’s estimated that roughly one million people are eligible for UC but don’t claim, so checking your eligibility is probably worth 5 minutes of your time!

Got savings? You may not be eligible for a payment…

Rightly or wrongly, even if you fulfil the eligibility criteria above you may not be eligible for UC if you, or your partner, have a chunk of savings or investments. That's because under current UC eligibility rules, your entitlement to UC decreases if you’ve over £6,000 in savings or investments.

For every £250 you have above £6,000, your UC entitlement is reduced by £4.35 a month. For example, if you, or your partner, have £6,500 in savings, then your UC payment will reduce by £8.70 a month.

Importantly, if your savings or investments total £16,000 or more, then you won’t get any UC at all. (One exception is for the self-employed. Individuals who work for themselves are allowed to put money aside for tax or business purposes without it being counted towards their savings).

Can you claim Universal Credit if your savings reduce?

If you receive a reduced UC payment due to your level of savings, you may be entitled to a higher UC payment should your savings decrease in future.

For example, say you had £18,000 of savings which meant you missed out on getting a payment. Three months down the line, you may find your savings have dipped below the £16,000 threshold. If this happens you can inform the DWP of your drop in savings by logging into your online journal, or by calling 0800 328 5644. As soon as DWP know about your change of circumstances you should be paid the UC you’re entitled to.

A word of warning... If DWP suspects your savings have decreased at substantial rate, then you may be asked for evidence to ensure that you’ve been spending your money for legitimate purposes. Otherwise, DWP may suspect that you’ve transferred part of your savings to someone else, or you’ve spent money frivolously in order to be eligible for a higher payment.

Will my savings balance be checked if I apply for Universal Credit?

While you may feel UC eligibility rules penalises savers who have been sensible by putting money aside for a rainy day, it’s important to be honest if you ever make a UC claim.

If you do make a claim for UC and understate your total amount of savings or investments, you may be committing benefit fraud.

This is something that DWP is hot on at the moment. The Department recently announced it was placing 1,400 more staff in its counter-fraud terms, plus a 2,000 strong team ‘dedicated to reviewing existing Universal Credit claims and enhanced data analytics to develop new ways to prevent and detect fraud.’

The Department says these actions should help to prevent £2 billion of losses due to fraud and error over the next five years.

DWP investigators do have the power to gather various types of evidence against those they suspect may be acting fraudulently. This may include looking into financial data, such as bank statements or savings accounts.

Can you get a savings account if you receive Universal Credit? Is there a credit check?

Unlike bank accounts, when you apply for a savings account, you won't face a credit check.

This means anyone living in the UK aged 18+ can apply for a savings account, regardless of their financial situation.

If you're interested in opening a savings account, do take a look at our best savings accounts guide.