Savings Limit - what is the process?

Hello,

Just looked at my bank account and think I may have hit the £6k savings limit for my ESA / PIP during this month.

I know I need to call them (and am going to), but wondered if anyone can tell me about the process from here? Specifically:

1. Am I right that I won't have my benefits stopped completely, but they will start deducting something from them?

2. How do they actually calculate savings? If I take the highest balance of my account, I went £400 over the limit mid-month just for a few days, after my benefits had been paid in. Do they include it all or give any allowance for the fact the monthly payments are used for my bills and food, etc.? Do they add it up on a particular date of month?

3. Do I need to call each ESA / PIP / Housing/Council Tax Benefit all separately to inform of just a particular one?

Thanks a lot in advance,

Glen

Thanks for the reply : )

Any thoughts on points 2 and 3?

Thanks,

Glen

Hi gbu82

When my savings exceeded £6000 some years ago (due to receiving an inheritance after a relative died) I phoned the ESA department to inform them. Like you I was on ESA income related, Housing Benefit and Council Tax Reduction. I was not then on PIP but was on DLA. As Gary has explained your level of ESA IR will be reduced. You do not have to inform 'PIP' about this as PIP is a non-means tested benefit so it will be unaffected by this issue. When I phoned ESA they then asked me to send them a bank statement showing the inheritance payment that took my savings over £6000. They may ask you to do the same or possibly to send more than one bank statement. ESA will then recalculate your ESA reducing it by the method described by Gary. They should then send you a letter detailing what your new rate of ESA IR will be and when that new rate starts. Regarding your HB/CTR your level of these benefits should not be affected by your savings exceeding £6000 (as long as they're below £16000) because the means test is applied to your ESA IR and so it is not applied to HB/CTR. You should still however inform HB/CTR of this change. The best way to do this is to send them a copy of the ESA letter mentioned above. This is what I did and as I say my level of HB/CTR was not affected. When my savings fell below £6000 I again contacted ESA and my ESA payment was increased to its full level again. In theory I could have notified them each time my savings reduced by £250 until it reached £6000 itself but I didn't bother to do that, had I have done so however they would have gradually increased my ESA using the method Gary explained.

I hope this helps.

Kind regards

Mr B ps I forgot to mention that when I informed ESA that my savings had fallen below £6000 again I sent a copy of the letter ESA sent me as a result to HB/CTR again even though as before it did not affect my level of HB and CTR.

What I am most interested in here is how they calculate your savings and what constitutes savings in the eyes of the people calculating them.

When I originally applied for Housing Benefit, all my money was added together - the money from my current account AND the money in my savings account. I pointed out that some several hundred pounds was in my current account because I had to pay a credit card bill - which I had with me - in a couple of days, but I was ignored and the amount for the bill was also calculated as savings, despite being in a current account. I don't think at that time it was an interest bearing account (I am not sure if it is these days, though).

So we are not only in the position of being paid next to nothing in interest on our scraped-together savings, but if my assessment for housing benefit was done correctly, every penny you have is considered to be "savings", regardless of rolling month-on-month bills and regular outgoings.

In the situation I described above, it made no difference with respect to the £6000 savings ceiling. But I would dearly like to know now what the correct process for calculating this ceiling is. I may come close to it by the end of this year if they calculate it as being a snapshot of your income on any given day - and so that would affect when on a monthly cycle I would want to go in and meet with anyone about benefits, if I had to. Obviously I wouldn't want to go in and see them on the day before my rent is paid because it might look artificially like I was flush!

Any definitive clarification I can get on this would be great. At the moment I am taking a weekly snapshot of every penny I own (in current account and savings) minus my credit card bill, but who knows if this is the way they calculate things these days? I for one do not ever want to be in the position of doing wrong here because I know how scary these authority figures can be if they think there is wilful deception going on, even when you would never do anything illegal knowingly. But as I understand it, ignorance of the law is no defence. (I'd love to be wrong about that!)

I have read that your PIP payment doesn’t count as savings during the payment period it is meant to cover, ie if your PIP is due on 4 June and you have £6000 in the bank on that date. That payment will not count as savings until the next one is paid four weeks later, by which time you will have spent a large chunk or all of it.