Benefits
The benefits system is changing and will probably change further still in the near future. If you have more than £16K in the bank you are only entitled to Jobseekers allowance for the first six months. More than £4K and you are not entitled to housing benefit. The Department of Work and Pensions (DWP), the local council and many other bodies can check what you have in accounts under the Regulation of Investigatory Powers Act 2000 (RIPA). The DWP don't seem to understand anything other than cash in the bank so it may be sensible to get your balance down below the limits before you claim. Interest rates are at an all time low of 0.5% and the most you are likely to get is 2%.
If you can put the money in some kind of pension that might do the trick and be legitimate.
You may well be better off withdrawing the cash, forgoing the interest and claiming benefits. JSA for over 25s is £71.70 and housing benefit is dependent on your post code. Some landlords knowingly charge more than the local council will pay, expecting you to pick up the shortfall.
Working tax credit is not dependant on savings, so any kind of employment can be good for people who have some savings. I am on national minimum wage which is equivalent to £12K a year and still get £800 a year. Combining a job with working tax credit and reducing your accommodation costs may be a viable alternative to living off your savings or JSA + housing benefit. This brings me to the next chapter, accommodation.