Savings Capital Limit for Means Tested Benefits

Published / Last Updated on 03/02/2015

Video explores the savings capital limit for Means Tested Benefits for Pension Credit, Housing Benefit and Council Tax Benefit.


“Hello there and welcome, thank you for joining me. Subject for this video is capital and the means test and I’m not talking about the means test for care fees which I’ve covered in separate videos, this is the means test of your capital for:

1. Pension credit and then
2. Housing benefit and Council tax benefit assistance, things like that.

So how much savings can you have before you start to get penalised or lose benefits or you lose entitlement?

If you have in total savings of less than £10,000 then you will not be means tested towards pension credit and likewise not be means tested for housing assistance, housing benefit, Council tax benefit assistance provided total savings below £10,000.

Now for pension credit once you go above £10,000, and there is no upper limit here, for every £500 you are above the £10,000 allowance they will deem that as you receiving £1 pound in income. So if you’ve got £11,000 in savings, then that's £1000 over its two lots of £500, you're deemed when they're calculating your pension credit that you have £2 of additional income. Okay? But clearly is no limit to that, if you had £500,000 in your bank account clearly that takes you way over and above the pension credit issues and you wouldn’t be entitled to pension credit, although sometimes there can be strange quirks where if your income was below the pension credit minimum income guarantee, you may still be entitled to it. But fundamentally what I’m really saying is anything above £10,000 starts to be means tested and taken into account when looking at pension credit.

As far as the housing benefit is concerned and assistance with council tax, there is a lower limit of £10,000 that I've already mentioned but there is also an upper limit of £16,000. So £10,000 to £16,000. If you have savings that are greater than £16,000 you are not entitled to any housing benefit assistance or council tax assistance, so once you're over £16,000 entitlement stops for those. If you’re below £10,000 in savings, not means tested, still entitled. If you're in between, so if you’ve got savings of £13,000 (smack bang the middle of £10,000 and £16,000) then there will be an adjustment, some of your savings will be taken into account and means tested and you may not get full housing benefit assistance or council tax assistance,

Hopefully, that explains capital, your savings and means tested benefits i.e. pension credit, housing benefit, Council tax benefit. Thanks very much for watching.”

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