Overview

• Universal Credit savings thresholds, unchanged since 2006, penalize claimants with over £6,000 in savings and disqualify those with £16,000 or more.
• Around two million families have had their benefits reduced or eliminated due to these frozen capital rules, according to the Resolution Foundation.
• Experts recommend raising the thresholds to £10,000 and £27,000 by 2026-27 to align with inflation, a move estimated to cost £135 million annually by 2029-30.
• Proposals also include exempting savings in Help to Save and Lifetime ISA schemes to encourage financial responsibility without penalizing low-income savers.
• The Department for Work and Pensions is under pressure to address the growing impact of these rules, which disproportionately affect families during a cost-of-living crisis.