Three myths about Universal Credit that could be costing you money

Universal Credit is the most claimed benefit across the UK, with 7.4 million claimants recorded as of last December. However, some estimates suggest an additional 1.2 million households throughout the nation are entitled but fail to claim their allocation from the DWP.

Policy in Practice anlysis in 2023 showed around £7.5billion of Universal Credit remains unclaimed as families undervalue their entitlement or believe widespread myths about eligibility. Some of the most prevalent misconceptions stop people from claiming if they have work, savings or need assistance with the application, potentially costing them hundreds each month.

People often believe Universal Credit is exclusively for those who are entirely unemployed. But, it's also made to assist people on a low income and the benefit won't automatically stop if you begin employment or increase your hours.

Your payments may be decreased if your earnings surpass your work allowance. This allowance typically ranges from £411 per month to £684 per month depending on your circumstances.

Once you exceed this allowance, the taper rate is then implemented. For every £1 additional you earn, your Universal Credit payment is decreased by 55p.

Official government guidance states: "If you or your partner are working, how much Universal Credit you get will depend on how much you earn. There's no limit to how many hours you can work and still get Universal Credit."

Most people know that if their savings exceed £16,000, they won't be eligible for Universal Credit. However, this is merely the upper capital limit, and having savings less than this can still impact your benefit amount.

The lower limit for savings on Universal Credit is actually £6,000. For every £250 you have above this, your payment will be reduced by £4.35. This is also rounded up, so if you have £6,400 in savings, a total of £8.70 will be deducted from your payments.

Few people are fully aware of what constitutes savings or capital in the DWP's calculations. For Universal Credit, it includes cash, any savings accounts, property you own but don't live in, cryptoassets, inheritance payments and even money that belongs to someone else but is in your name. The full list can be found on Gov.uk.

Applying for Universal Credit can be a complex and stressful process, causing many people to delay or deter them from applying altogether. But you're not alone in this.

Citizens Advice runs a Help to Claim service that offers free support from trained advisors to guide you through your claim. They can also help with things like preparing you for your jobcentre appointment, and any information provided to the service is confidential.

Universal Credit can offer a variety of support based on your situation. The minimum monthly standard allowance is £316.98, and claimants could receive hundreds more each month if they are disabled, have children or caring responsibilities.

Successfully claiming Universal Credit can also qualify you for other types of assistance such as the Warm Home Discount, Help to Save accounts, WaterSure scheme, social tariffs and free school meals. All these schemes will have additional eligibility criteria as well.