How your benefits may be means-tested

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Some benefits are means-tested. In other words, the amount of income and capital you have can affect your eligibility. Capital includes savings, investments, and property other than your own home.

Different means-testing rules apply, depending on whether you're under or over the minimum State Pension age. The information on this page only applies to people over the current minimum State Pension age (rising from 60 to 66 between 2010 and 2020). This information may also not apply to couples with one person under and the other over the minimum State Pension age, if they have to claim a new benefit called Universal Credit.

Pension Credit

For Pension Credit, there is no upper limit of capital for you to be eligible. This means there is no maximum level of capital you can have in order to claim the benefit. Capital up to £10,000, and any income generated by that capital, are ignored. You will be treated as having ‘assumed income’ of £1 for every £500 (or part of £500) of capital you have above £10,000. If you have a partner, you will be assessed as a couple and the first £10,000 of your joint capital will be ignored.

Housing Benefit and Council Tax Support

The lower capital limit for Housing Benefit and Council Tax Support is £10,000. If you have capital of up to £10,000 this, and any income you receive from this, are ignored. You will be treated as having assumed income on capital above £10,000 as set out above.

Unlike Pension Credit, Housing Benefit and Council Tax Support also have an upper capital limit, which is £16,000. If you have more than this capital limit you will not be entitled to any Housing Benefit or Council Tax Support, unless you qualify for Pension Credit Guarantee Credit.

Capital taken into account

Most types of capital are taken into account for means-testing. This includes:

  • cash
  • money in bank or building society accounts, including current accounts that do not pay interest
  • National Savings accounts and certificates (there are special rules for valuing these)
  • income bonds
  • stocks and shares
  • property (other than your own home)
  • Premium Bonds
  • a share of any savings you own jointly with other people.

Some types of capital are ignored. This includes the value of the property you live in, if you own any, and any lump sum payments you received after deferring your State Pension.

Income taken into account

Some types of income are taken into account in full for means-tested benefits, but others, including Disability Living Allowance and Attendance Allowance, are completely ignored. Other types of income are disregarded in part.

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Dr Naim Dangoor OBE

Dr Naim Dangoor

We are grateful for the generous support of Dr Naim Dangoor CBE and The Exilarch's Foundation

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