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Hi @sophier123
The £7,4,00 is ignored completely for 12 months from the date it is paid to you. You can spend the money as you like just as poppy says. After the 12 month period capital below £6000 continues to be ignored. Capital over £6,000 is treated as providing income, known as “tariff income”, of £4.35 per month for each additional £250 (or part thereof).
The upper limit is £16000, so anyone with savings (capital) over £16,000 cannot get Universal Credit.
If after the 12 month period your capital is over £6000 and you spend your capital to increase your UC then you could be treated as depriving yourself of capital. However, you can still spend capital on goods and services which are reasonable in the circumstances. What is considered reasonable isn’t defined but day to day necessities and replacing household items would probably be OK but an expensive holiday wouldn’t be. If you still had capital over £6000 after the 12 month period it would be sensible to keep receipts for purchases so you could demonstrate that you weren’t deliberately reducing your capital.
sophier123 said: Great thank you, so if I spend money now for example on a holiday and I’m under 6,000 now they won’t ask about it in 12 months?
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