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Universal credit and saving for a house deposit

(221 Posts)
Musereader Tue 24-Oct-17 15:28:17

I am a single parent with one child, i could not cope without tax credits as my rent, council tax and childcare costs are more than my montly wage so i rely on the tc to cover the bills and food.

I do work in national goverment on the lowest rung in a call centre and have been looking through the releases we get and i am horrified to find out that you cannot claim UC if you have more than £16k in savings. Between £16k and £6k in savings does mean a reduction in UC. This is not the case in tc

A house in my area ranges from £150 to 200k so a 10% deposit is £15k minimum.

Basically as soon as i save any amount of money that looks like a reasonable deposit i have to use savings to pay childcare because my UC would reduce.

So aibu to hope that the goverment does do a uturn on UC roll out which may mean that i never have to go on UC and be subject to these silly savings rules

Lifeisforliving25 Tue 24-Oct-17 15:29:55

I think the point of benefits is to stop people from starving and going without not to save money so I would say you are being unreasonable.

YellowMakesMeSmile Tue 24-Oct-17 15:31:39

The rules now are silly, savings should be used before turning to state support. If UC corrects that then it's a good move.

RunningOutOfCharge Tue 24-Oct-17 15:32:04

Of course yabu!

Ellendegeneres Tue 24-Oct-17 15:36:30

I don't know. If I didn't have savings, when my appliances break (which they all have the last 6months) I'd never be able to replace them. No way can I save for a deposit on a house though!

Singleandproud Tue 24-Oct-17 15:38:50

As far as I know there were similar rules under TC anyway.

Your child wont be young for long so you wont need to pay childcare and will be able to take more hours at work and not rely on UC. The other option would be to move to a cheaper area (you can get a 2 bed house in my area for £80000) or possibly retrain whilst your child is young so you are ready to take promotions or a new role later in life and buy a house then.

Theresnonamesleft Tue 24-Oct-17 15:39:18

I know what you mean op.
When it rolls here I will be on it. I get a bit of hb, ct reduction and tax credits. This helps keeps my head above water and allow a bit for savings, as I’m sure it does for many.
The kicker is a mortgage would be £300 a month less than my rent. This saving would allow me to come off benefits. But under UC this won’t be possible because I won’t be able to save for the deposit.

BarbaraofSevillle Tue 24-Oct-17 15:46:45

Well as a single parent on a low wage, you wouldn't qualify for a mortgage on a £150-£200k house without a £100k+ deposit anyway, so it's a moot point.

And presumably you'd take forever to save up any kind of deposit, TC, UC or neither?

To qualify for a mortgage on a house that value, you'd need to be on £30-40k and you wouldn't qualify for UC or TC anyway, so you'd be able to save up as much as you'd need.

SilverySurfer Tue 24-Oct-17 15:48:21

YABU. I don't understand why someone who has 6k+ in savings would apply for benefits. They are there to support those who have no or very basic incomes not to be used for living expenses while you save money for a mortgage. If this applies to the new system I fully support it.

ghostyslovesheets Tue 24-Oct-17 15:51:18

Yanbu op - if you had your own home you would no longer be claiming HB for starters- people think claiming any kind of benefits means you should be all scraping and grateful and in no way attempt to better yourself - well done for saving

Musereader Tue 24-Oct-17 16:26:14

I think silvery surfer you are missing the fact that i am in full time work and i cannot work without the tax credits/UC as my childcare and housing alone are more than my wage, i am using benefits to work

Musereader Tue 24-Oct-17 16:27:05

I dont have housing benefit since returning to work only cb and tc

Antigonads Tue 24-Oct-17 16:30:16

But if you need to claim benefits to keep your head above water, how are you going to save money?

SilverSpot Tue 24-Oct-17 16:31:42

@Musereader so you earn what? £20k? You'll be able to borrow maximum £100k, probably no more than £80k. So you need to save at least £55k probably more like £80k.

Good luck saving £80k.

xyzandabc Tue 24-Oct-17 16:36:45

It seems harsh but if someone managed to save 16k whilst claiming UC, then it is essentially using the UC to pay for a house deposit. Really not the purpose of it.

There are help to buy schemes and 1st time buyer schemes advertised in my area to help people who haven't got a 10% deposit. I think they are nationwide government backed, though don't quote me on that. It would be much better to utilise those than use UC as a house deposit.

DJBaggySmalls Tue 24-Oct-17 16:41:26

I sort of get your point, but if you are on UC its unlikely you'll get a mortgage. There has to be a cut off point for savings somewhere.
Before the council house sell off, most of us expected to rent for life. Its one reason we had council housing stock.

Birdsgottafly Tue 24-Oct-17 16:43:33

Get a tin box and it it in the loft.

Birdsgottafly Tue 24-Oct-17 16:44:35

" but if you are on UC its unlikely you'll get a mortgage"

Long term benefits are accepted as income in a Mortgage calculation.

LonginesPrime Tue 24-Oct-17 16:47:26

OP, I see why you’re annoyed as the change in your financial circumstances is caused by a change in policy as opposed to any change in what you’re doing.

I get that it’s frustrating when you’re relying on benefits to be at the mercy of the government, with their ever-changing rules as to what benefits you do or don’t get.

But YABU to expect to be able to save up for a house while in state benefits. Obviously.

MyDcAreMarvel Tue 24-Oct-17 16:50:33

OP There will be transitional protection if you have savings and are migrated onto UC.

MyDcAreMarvel Tue 24-Oct-17 16:52:35

People have short memories. Tax credits were never "benefits" and people earlier 70k claimed them.
That's why savings were/are allowed.

Hippiechic Tue 24-Oct-17 16:54:51

How long does transitional protection last?

autumnintheair Tue 24-Oct-17 16:56:46

Not sure about saving for a house, stability etc an asset. However I do think savings should be higher than 16 grand before benefits affected. Not sure what figure but higher than that n

MyDcAreMarvel Tue 24-Oct-17 16:58:59

Until change of circumstances partner leaves or joins household, earn below the required amount are two.
There aren't that's many changes that count.

MyDcAreMarvel Tue 24-Oct-17 17:02:01

Op I will be flamed for this but in your position I would gift parents or other relative money in cash every month. When you apply for a mortgage they can then gift you a lump sum. Coincidentally theses amounts would be the same.
By owning a house you will never claim the housing element of UC so you claim less money.

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