Campaigners are urging the Government to overhaul long-standing capital limits that restrict Universal Credit payments, after data showed the thresholds penalise hundreds of thousands of low-income households. Under current Department for Work and Pensions (DWP) guidelines, holding modest personal savings can lead to financial penalties for benefit claimants.
Petition seeks inflation-linked savings limits
Proposals have been submitted via an official parliamentary petition seeking to increase these thresholds in line with historical price increases. If successful, the changes would enable millions of benefit recipients to build personal savings without losing financial help. Recent policy changes by the DWP have already altered the overall benefit framework across the UK, including an above-inflation increase to standard allowance payments and the complete removal of the former two-child payment cap earlier this year.
The existing rules specify that anyone holding £6,000 in savings or investments will face automatic reductions in payments. For every £250 held above this starting figure, the DWP deducts £4.35 from a claimant's monthly allowance, writes Nicholas Dawson for the Express. Anyone who accumulates £16,000 or more in capital loses their entitlement to the benefit entirely. For couples living together, combined savings are measured against these limits, even if neither partner is individually eligible.
830,000 families hit by capital limits
Data released by the Resolution Foundation showed that approximately 830,000 families faced payment reductions due to these capital limits. An additional 1.2 million households had reached the upper limit, resulting in a total loss of their monthly support.
Campaigners point out that these specific thresholds have remained completely unchanged since 2006, when the tax credits framework was updated. A public petition now calls for an automatic annual review system to systematically adjust financial boundaries. According to data from the Bank of England, adjusting the original figures for historical inflation would increase the lower capital limit to roughly £10,700. Meanwhile, the upper threshold where entitlement ceases entirely would rise to approximately £28,500.
Support grows for petition
Support for the proposal continues to grow among members of the public online. The petition organisers stated: 'Restoring the limits' original real-terms value could allow claimants to build financial resilience.'
The campaign also highlights that joint claimants need separate considerations to ensure both partners retain financial independence. Higher limits for couples could help protect individuals who might be experiencing domestic or financial abuse.
Should the online submission reach 10,000 signatures, Government ministers must issue an official response to the demands. Reaching 100,000 signatures will result in the matter being formally considered for a full parliamentary debate. The petition is available for signing online.
