What counts as capital

Savings generally count as capital. This includes:

• cash savings
• premium bonds, shares and unit trusts
• money in a bank, building society, or PayPal account
• money in an ISA or Help to Buy ISA

It usually doesn’t matter why you save the money, even if it’s for paying bills, saving for a deposit on a home or intending to use it to pay off your mortgage. If you’re under 60 and have a Lifetime ISA, 25% can be ignored to cover the withdrawal of the government bonus.

If an ISA is in your name, it is treated as your capital. You cannot usually say that you’re holding it for someone else, such as your child.

Fixed-term investments count as capital.

If your investment cannot currently be accessed, it may mean it has little or no value. If you can turn your investment into cash, sell it, or use it to get a loan from a reputable bank, the amount you could get from it will count as capital.

Cryptocurrencies or virtual money, such as Bitcoin, are treated in the same way as other investments. You will need to provide evidence of their current value, such as a screenshot of your crypto wallet, to the relevant benefits office.

Any property or land you own counts as capital, but some types of property may be disregarded, such as the home you live in.

Visit the disregarded capital section to find more information.

Income that is not spent by the end of your Universal Credit assessment period is treated as capital. Visit our guide to learn more about Universal Credit assessment periods.

Income from capital is also treated as capital if the capital is not ignored and doesn’t already give an assumed monthly income. This includes:

• interest from savings
• dividends from shares
• rent from property that is not your home

This income is treated as capital from the date it is due. This prevents the same money from being counted twice.

Example

Adam has a flat he doesn’t live in. He has £4000 equity in the flat. He rents it out for £200 per month. The £200 is not treated as income. Instead, his equity in the flat will be treated next month as being £4200.

Money you have, including loans, counts as capital.

You may be able to show that money or other assets are being held for someone else. In some cases, these may be ignored. Visit the disregarded capital section to find more information.

If you lend money to someone, it may still count as 'notional capital' if the DWP thinks you intentionally reduced your capital to qualify for or to increase your Universal Credit entitlement (known as deprivation of capital). The DWP will consider that you still have a legal right to be repaid, even if the money is no longer in your account.

The value of notional capital is the amount you are expected to get back. This may be less than the amount you lent, or nil if repayment is unlikely.

Whether capital held in a trust counts as your capital depends on the type of trust:

• capital held in a non-discretionary trust is counted as your capital because you can access the money at any time.
• capital held in a discretionary trust isn’t counted as your capital because the trustee decides when payments are made and you cannot demand payment.

If the trust is set up from personal injury compensation paid to you or your partner, different rules may apply. Visit the disregarded capital section to find more information.

Payments received from trusts

Any payments you receive from a trust can be taken into account, regardless of the type of trust:

• regular payments over a period are treated as income
• one-off or lump-sum payments are treated as capital.

If trustees of a discretionary trust pay your bills directly or buy items for you that would normally be ignored, this will not affect your Universal Credit.

Money held by your solicitor usually counts as capital. This includes compensation payments. Visit the disregarded capital section to find more information.

If you have legal aid, money held by your solicitor while the statutory charge is worked out does not count as capital.

Money you are due to receive, now or in the future, may have a capital value unless you cannot legally transfer or sell that right.

If you are due to inherit money, it is usually counted when the estate is distributed. It may be counted earlier if probate has been granted and nothing is stopping the estate being finalised.

If you need support and advice on what to the after a death including probate, contact Bereavement Advice Centre.