The limit on how much savings someone will be allowed to have while claiming council tax benefits looks set to increase following concerns it could put people off saving.

Epsom Council had planned to introduce a maximum limit of £6,000 savings for people who do not get income support or job seekers allowance but this was raised to £10,000 last night.

The move is part of the Government’s sweeping welfare reforms to the current council tax benefit system which involve replacing the current system with localised support schemes across the country.

The current savings limit is £16,000 but this is having to be lowered by councils in response to a 10 percent drop in funding from the Government.

Concerns were raised that a lower ceiling would discourage vulnerable from saving and would leave them with little financial back-up in case of emergency.

The acting chairman of the strategy and resources committee, Councillor Eber Kington, said: "It’s a way of saying we want you to save if you can."

Final recommendations will be put before councillors making a decision on the new scheme on December 11 and the changes will take effect in April.

Other proposed changes to the council tax benefit system include removing the second adult rebate and restricting backdating of payments to three months.

Councillors also debated the proposal to restrict the maximum award to people living in Band D properties (usually two bedroom homes) or smaller.

The proposal means only reduced amounts would be available to families living in bigger properties.

Councillor Jean Steer said the savings needed to be spread across as many people as possible to minimise the impact on those getting benefits.

She said: "I understand the concerns but the six or seven pounds or so people might be paying is not really that much hardship.

"We have to do the best we can."

Labour Councillor Sheila Carlson said £7 might not be very much for some people in the chamber but for those on the edge it was an awful lot of money.

She said: "I don’t think anyone in the chamber should be flippant about saying £7 is nothing."

Councillor Kington said it was uncalled for to dismiss someone making a reasoned comment as ‘flippant’, adding that they were being forced into making difficult decisions.

Coun Kington said: "What we are doing is what the Government is imposing on us."

A small hardship fund is expected to be established to help those in exceptional cases.

During a public consultation on the proposed changes in the borough, only about 45 percent of respondents agreed that lower limits on savings should be introduced.

About two thirds of respondents agreed that the maximum award should be restricted according to the property value bands.