The TUC says the Department of Work and Pensions is failing to demonstrate joined up working with the Treasury – and that low income households lose out as a result.In a new report, Savings and Assets for all, the TUC calls on Ministers to reform the capital rules affecting means-tested benefits to provide more of an incentive to low-income savers.
It shows how current rules on savings disproportionately hit those on low incomes. As an example, it says that for people below retirement age on Income Support or means-tested Jobseeker’s Allowance, there is an upper limit to savings/capital of 8,000 pounds. Families with more than this in savings are ineligible for these benefits.
Families with smaller savings are also hit by ‘tariff income’ rules. Once they have more than 3000 pounds in savings, their benefits are reduced as if they received a pound a week for every 250 pounds they have saved.
TUC General Secretary John Monks says the policy discourages people to act as the Treasury encourages, and to save for a rainy day.
He said: ‘The Treasury is encouraging poor families to save at the same time as the Department for Work and Pensions penalises those who do – it’s time to reform the rules to give us joined-up-government in this area.’
The TUC report ‘Savings and Assets for all’ is available at www.tuc.org.uk/welfare/tuc-4216-f0.cfm