Can You Get Universal Credit If You Own a House

Owning your own home in the UK does not automatically prevent you from claiming Universal Credit. While many assume that this benefit is only for renters or those without assets, the truth is that homeowners can qualify under the right circumstances. Universal Credit is a means-tested benefit designed to support people with low incomes or no income, whether they are renting, mortgaged or living in a home they own outright.

This article explains how Universal Credit works for homeowners, who is eligible, how mortgage costs are treated, what factors affect your entitlement and how your income, savings and living arrangements influence your claim. It is written for homeowners in the UK who are facing financial difficulty and want to know whether they can receive support through the Universal Credit system.

What Is Universal Credit?

Universal Credit is a government benefit that combines six previous means-tested benefits into one monthly payment. These include income support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Housing Benefit, Working Tax Credit and Child Tax Credit. It is designed to simplify the system and support people whether they are out of work, unable to work or on a low income.

The amount of Universal Credit you receive depends on your household income, savings, personal circumstances and housing situation. It is available to people of working age across England, Scotland and Wales. If you have reached State Pension age, you will usually need to claim Pension Credit instead.

Can Homeowners Claim Universal Credit?

Yes, homeowners can claim Universal Credit if they meet the eligibility criteria. You do not need to be renting to qualify. However, the type of support you receive may be different from someone who is paying rent. While renters may receive a housing element to help with rent costs, homeowners may be entitled to assistance with some of their mortgage interest payments through a separate scheme known as Support for Mortgage Interest.

Universal Credit is still means tested for homeowners, which means your income and savings are assessed. If you have savings over £16,000, you will not be eligible. If you have between £6,000 and £16,000, your benefit will be reduced due to assumed income from your savings. Your eligibility also depends on whether you are working, how many hours you work, whether you have children or disabilities and other personal factors.

What Help Can You Get With Mortgage Payments?

If you are eligible for Universal Credit and you own your home, you may be able to apply for help with the interest on your mortgage through Support for Mortgage Interest, or SMI. This is not part of the Universal Credit payment itself but a separate government loan that is repayable if you sell your home or transfer ownership.

SMI can help with the interest on your mortgage or a qualifying home improvement loan. However, you cannot get help with the capital repayments on your mortgage or with any arrears. To qualify, you must have been claiming Universal Credit for at least three months before support begins, and you must not be earning income from work above a certain threshold.

SMI is a loan secured against your property and interest is charged, though at a lower rate than commercial loans. You do not have to repay it immediately, but it becomes due if the property is sold or transferred.

How Does Home Ownership Affect Your Claim?

Owning a property outright will not disqualify you from Universal Credit, but it may affect the housing costs element of your payment. Since you are not paying rent, you will not receive the rent element of the benefit. However, you may still receive support for your general living costs, depending on your income and household circumstances.

If you have a mortgage, the housing costs element is not paid directly towards your mortgage, but you may qualify for the SMI loan to help with the interest. You must still meet all the other criteria for Universal Credit and report your housing costs during the application process.

If you have a second home, own property abroad or have property that you rent out, these may count as capital and could affect your entitlement. Rental income and property value will be considered under the means test, and you must declare all assets.

What Income and Savings Are Taken Into Account?

Universal Credit takes into account your total household income, including earnings from employment or self-employment, pensions, maintenance payments and most state benefits. Income from savings and investments is also assessed.

If you have less than £6,000 in savings, it will not affect your claim. If you have between £6,000 and £16,000, your entitlement will be reduced by a notional amount based on your capital. If your savings exceed £16,000, you will not usually be eligible for Universal Credit.

Savings can include money in the bank, premium bonds, stocks, shares and the value of property other than the one you live in. The value of your main home is not counted, but any other assets must be declared.

Can You Work and Still Get Universal Credit as a Homeowner?

Yes, you can be employed or self-employed and still receive Universal Credit, provided your income is below the thresholds set out in the rules. The benefit is designed to top up low incomes and encourage people to move into or stay in work. If your earnings increase, your Universal Credit payment will reduce gradually rather than stop immediately.

If you live with a partner, their income and savings are also assessed, even if they are not the homeowner. You must report all income and changes in circumstances promptly to ensure you continue to receive the correct amount.

Case Example

A single homeowner in Bristol who recently lost her job applied for Universal Credit. She owned her house outright and had no savings, but still needed support with living costs while she looked for work. Because she had no income, she was awarded the standard allowance under Universal Credit. Since she did not pay rent or have a mortgage, she did not receive any housing costs element. She reported all changes to her circumstances, including when she started part-time work, and her Universal Credit award was adjusted accordingly.

Conclusion

Owning a house does not prevent you from claiming Universal Credit, but it does affect the type of support you may receive. While you cannot get help with rent if you do not pay any, you may still be eligible for help with living costs and, in some cases, mortgage interest. The key factors that determine your entitlement are your income, savings, housing costs and household composition. With the right information and a clear understanding of how the system works, homeowners can access the support they need during periods of financial difficulty.