Since the money that you hold determines your financial status, it can bear an impact on the benefits you claim or intend to claim. This is the reason why we aim to explore through this article if you can claim benefits if you have money in the bank. We will also discuss benefits that may be affected by your savings; as well as the impact of savings on your benefits claim.

Can You Claim Benefits If You Have Money In The Bank?

Yes, you can claim benefits if you have money in the bank. However, there are certain factors to be considered in such a case. These include the following: 

  • Money held in a bank account by a claimant will only affect their means-tested benefits
  • The amount of money that someone of working age can have without affecting their benefits should not exceed £16,000
  • Money held in a bank account by a claimant does not necessarily affect non-means tested benefits that they claim

Benefits can only be claimed if someone has savings that range between £6,000 and £16,000. Savings below £6,000 will not affect your benefits claim at all. As the amount starts to increase from £6,000, the amount that you can claim will start to decrease. If a claimant has more than £16,000 in savings they will not be eligible to claim benefits and their application may be rejected. 

If you have previously been claiming benefits with savings less than £16,000 and experience a sudden increase in them (this can be due to a lump sum payment, backdated benefits claim, inheritance or sale of an asset), you must inform the DWP of this change in circumstance. Your benefit claim was based on your previous financial status. This increase in the amount of money held in a bank requires a fresh assessment of your finances so that your benefits payments can be modified accordingly.

However, these rules apply to individuals who are of working age or under the State Pension age. Benefits that are affected by the means-test for an individual under State Pension age, include the following:

  • Universal Credit
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Income Support
  • Housing Benefit
  • Council Tax Support
  • Tax Credits (Working Tax Credit and Child Tax Credit)

In the case of individuals aged above the State Pension age, the means test is carried out differently. The first £10,000 of your savings is not considered during a means test. For every £500 above that amount, the claimant is considered to have £1 of weekly income. 

It is based on this weekly income that their benefits payments are calculated. There is no upper limit or maximum amount that someone over the State Pension age can have in the bank to claim benefits.   

Can The DWP Check Your Bank Account If You Claim Benefits?

Yes, the Department for Work and Pension (DWP) can check your bank account if you claim benefits. However, this is not a regular practice and is only undertaken in certain situations especially when the authorities suspect a claimant of committing benefit fraud.

The DWP are likely to gather as much evidence as possible to confirm the financial position of a claimant so that any unreported income or savings can be checked. They can check your bank account for transactions that are being conducted, gain access to your bank statement and monitor any financial transactions you undertake if they suspect fraudulent behaviour.

Sometimes, the DWP checks your bank account if someone has reported you to them with suspicion of undeclared income or savings and they need to confirm the claim through the gathering evidence. Other times, they may conduct a random check to keep surveillance on benefit fraud cases. 

Can You Lose Your Benefits By Hiding Savings?

Yes, you can lose your benefits claim if you purposely hide money that is saved in a bank or seek other ways to hide your savings. 

The most commonly practised methods of hiding money include asset transfers, and putting your money in a trust or an offshore bank account. However, if found out by authorities, it will be considered a deprivation of capital and you may not only lose your claim to state benefits but will also have to pay back the amount you received over your eligibility.

Below is a list of benefits that claimants may no longer be able to claim when found guilty of benefit fraud:

  • Carer’s Allowance
  • Employment and Support Allowance
  • Industrial Injuries Reduced Earnings Allowance
  • Industrial Injuries Retirement Allowance
  • Jobseeker’s Allowance
  • Severe Disablement Allowance
  • Widowed Mother’s/Parent’s Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Industrial Death Benefit
  • Industrial Injuries Disablement Benefit
  • Pension Credit
  • Universal Credit
  • Working Tax Credit
  • War Disablement Pension
  • War Widow’s Pension
  • Income Support
  • Industrial Injuries Unemployability Supplement
  • War Pension Unemployability Supplement
  • War Pension Allowance for Lower Standard of Occupation

Can You Transfer Your Savings To Claim Benefits?

No, you cannot transfer your savings or money saved in a bank merely to claim benefits. This act will be considered a deprivation of assets and if the authorities find out about your deliberate attempt to transfer money in the bank elsewhere just to claim benefits, your benefits claim can be suspended or completely revoked. You may also be fined or sentenced to a jail term if you are proven guilty of benefit fraud.

While most individuals consider that transfer of savings, selling of one’s property or gifting their home to a family member is all that counts as deprivation of assets, that is not all. Any of the following actions will be counted as deprivation of assets if it takes place within a short period before one’s claim for benefits:

  • to give away a large sum of money
  • to transfer the title deed of one’s property
  • to spend a large amount of money which is in contrast with the spender’s usual spending pattern
  • to lose money through gambling 
  • to use savings to purchase items excluded from a means-test such as a car or jewellery

Conclusion:

While one may be able to claim benefits if they have money in the bank, their means-tested benefits can be affected if the amount exceeds a certain threshold. While individuals aged below the State Benefit age can lose their benefits claim if the money they hold in a bank exceeds this threshold, claimants who are older than the State Pension age may only experience a reduction in the amount that they claim.

FAQs: Can You Claim Benefits If You Have Money In The Bank?

Can the DWP check my savings?

Yes, the DWP can check your savings as they have access to your bank account details during a means-test in response to your benefits claim. Additionally, they can also gather evidence through document tracing, interviews as well as monitoring of your social media.

Do benefits stop if you inherit money?

No, benefits may not necessarily stop if you inherit money. In case of a one-off payment through inheritance, it will be added to your assets; while an annuity (paid at monthly intervals) will be considered as an income and may reduce your benefits.

How will a lump sum affect my benefits?

A lump sum amount will be considered as part of your savings and will reduce your benefits claim for means-tested benefits. These include Council Tax Support, Housing Benefit, Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Pension Credit, Tax Credits (Child Tax Credit and Working Tax Credit) and Universal Credit.

Do gifts count as income?

No, one-off gifts received from friends, family or through charity do not count as income during a means test. When a gift of money increases your savings by more than £6,000, only then will it bear an impact on your benefits claim.

How much money can you have in the bank and still claim benefits in the UK?

You can have up to £10,000 in the bank and still claim benefits in the UK. In the case of Pension Credit, this amount can be up to £16,000.

References:

How do savings and lump sum payouts affect benefits? | MoneyHelper

Savings and benefits rules | Raisin UK

DWP will check your bank account for these 7 things looking for benefit fraud – Wales Online

How savings can affect benefits

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