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Benefit recipients have been alerted to a £4.35 rule that allows the Department for Work and Pensions (DWP) to deduct from their funds. If your cash, savings or investments fall between £6,000 and £16,000, the DWP will decrease your Universal Credit (UC) payments.
For every £250 you’ve stashed away, they’ll deduct £4.35 from the money you receive. Any remaining sum under £250 will still be reduced by £4.35.
The DWP provides an example on its website: “Sam has savings of £6,300. She has £300 of savings over the limit of £6,000. Her Universal Credit is reduced by 2 x £4.35 a month, that’s £8.70. Leeroy has savings of £14,500. He has £8,500 of savings over the limit of £6,000. His Universal Credit is reduced by 34 x £4.35 a month, that’s £147.90. ”
The DWP cautions individuals that they must adhere to the rules outlined in their claimant commitment. Failure to comply with requirements such as attending appointments or accepting job offers could result in a loss of over £400 per month.
The claimant commitment outlines what you must do to seek employment, or increase your earnings if you’re already employed. Penalties for not adhering to the DWP’s rules are referred to as sanctions.
Money taken off your payment
Your payments might be reduced if any of the following apply:
you are paying back an advance on a Universal Credit payment
you would get above the amount limited by the benefit cap
you’ve been overpaid benefits in the past
you owe money for Council Tax, court fines, electricity, gas, water or Child Maintenance
you pay your gas or electricity bill directly from your Universal Credit payment
you have a paid job
you have other income – for example, money from pensions or certain other benefits
you have more than £6,000 in money, savings and investments
If you have over £6,000 in money, savings and investments, your payment will be reduced by £4.35 for every £250 you have between £6,000 and £16,000. Another £4.35 is taken off for any remaining amount that is not a complete £250.
Find out more about money taken off your Universal Credit payment.
In May 2025, approximately 5.3% of UC claimants who could be subject to sanctions were penalised – roughly equating to 111,300 individuals. Between February 2024 and April 2025, the DWP issued 611,820 sanctions – 550,000 of these were for failing to attend appointments or interviews.
If people are single and under 25, or a joint claimant with one or both under 25, they stand to lose £10.30 a day for each day they’re sanctioned. This figure drops to £8.10 for those under 25 and rises to £13.10 for single individuals over 25. Sanctions are reduced by 40% for those aged 16 and 17. The severity of the sanctions – and the amount of money forfeited – is determined by how serious the DWP deems actions to be.
Sanctions are categorised into low, medium and high levels. Low-level sanctions could be imposed for failing to attend appointments, not providing work-related documentation or refusing training courses or employment schemes. However, these sanctions can be quickly lifted by completing whatever activity the DWP has requested. Medium-level sanctions are applied for reasons such as failing to look for work and not being available for job interviews.
These last for four weeks – and 13 weeks if you’ve been sanctioned previously. High-level sanctions can be enforced when you refuse a job without good reason or leave a job due to misconduct. These sanctions can last between three and six months. A Jobcentre work coach or an employment scheme provider is the one who notifies the DWP that a claimant may have failed to meet expectations. A decision maker will then consider the information and evidence presented to them, including the claimant’s reasons for failing to meet the requirements placed upon them. If you disagree with a sanction decision, or have additional evidence, you can request a review.
This is known as a mandatory reconsideration. You do this by submitting a note in your Universal Credit account, over the phone, face to face or in writing. For some sanctioned claimants, hardship payments may be available. These are roughly 60% of the UC standard allowance and must be repaid through UC. The DWP states online: “When you claim Universal Credit you will need to accept your claimant commitment.
“Your claimant commitment will set out what you have agreed to do to prepare for and look for work, or to increase your earnings if you are already working. It will be based on your personal circumstances and will be reviewed and updated on an ongoing basis. Each time it is updated, you will need to accept a new claimant commitment to keep receiving Universal Credit.
“The claimant commitment is your record of the responsibilities that you have accepted in return for receiving Universal Credit, and the consequences of not meeting them.”
