Can I use my savings to pay off some of my mortgage, and then claim benefits?

[BzzzzzOff]

Well aware that I'm about to get flamed for this, but I am fed up with being penalised for being responsible with my money.

DH and I have £30k in savings, which was intended to go towards our next house when the DC start school and I go back to work. Currently I am a SAHM with two toddlers, and DH is on a low income (£24k). We just about manage without needing to dip into our savings, but from next year they will start depleting pretty rapidly as our energy fix comes to an end.

I know how lucky we are to have plenty of savings, but I am really upset that if we'd been reckless and bought the bigger house before having children then we could be on benefits now and receiving all this extra help. As it is, we'll probably never be able upsize as our savings will be gone.

So, I think I'm going to stick £25k onto our mortgage, keeping £5k in the bank, and start claiming Universal Credit. Could this be considered deprivation of assets? Frankly don't care if this is "immoral", I am just wondering how careful I need to be in order to protect the savings I worked so hard for.

I don’t think it’s immoral. From dim reserves of memory you may have to wait six months or so to be able to make a claim but I’ll admit that’s a vague memory from some time ago. Hopefully someone else will be more helpful with your question. But I wanted to answer because I don’t see anything wrong with what you’re doing at all.

You should be able to keep more than £5K in the bank. I'd do exactly the same thing.

Have you got a mortgage account?

Have you used the benefit calculator to see how much you would get ?
I think the reality is often very different to the "getting wide screen TVs and living a life of luxury " narrative that is often spun ?

I’d do exactly the same in your position.

It's not really deprivation of asset since you own the house and with the interest rises it's not a bad choice anyway. But they will want to see bank statements for up to six months for all your accounts I believe and if you put the savings on the mortgage, then start your claim the next day. You're potentially going to be questioned.

It comes down to intentions. If they think you spent your savings just so you could qualify you won't get help. If you tried to negate higher mortgage payments by paying a lump sum off, then at a later date find your income has dropped and you need to claim, that's fine.

How big is your mortgage and would you be limited to a 10% overpayment?

I completely agree with you OP. I think it's a sensible idea. And if you plan to upsize in the future you will own more of your current house so doesn't really effect you.

I'd be wary and get robust advice first. I've no first-hand knowledge but I believe the DWP are strict and harsh, bird in the hand and all that.

You would need to have a genuine reason for putting the money into the mortgage other than I wanted to claim benefits. They will want to see bank statements and will ask why you did it. There is a very good chance you would be turned down for benefits. If you choose to do it you would need to wait 6 months to start claiming benefits so there is no sign of the money on the bank statements they see.

Regardless of the benefits situation, this is key - most mortgage agreements allow you to repay 10% of the outstanding balance per year without penalty, but no more. You need to bear that in mind and check with your lender.

It would likely be considered deliberate deprivation of assets because the intent is to claim benefits.

REALLY @BzzzzzOff ??? I notice you didn't put a poll on. I wonder why?!

Yes it IS immoral and also, YES it is 'deprivation of assets!'

I think this is a good idea anyway, because assuming your mortgage allows for it, it would presumably lead to your monthly payments dropping.

It would be more sensible to go back to work sooner, or have your husband look for extra hours/better job.

Don't think it's immoral. The system is ridiculous and I'd do the same. I think you can have more than that in savings so worth checking and of course you can be penalised for overpaying on your mortgage, depending on provider.

You’re delusional and frankly no better than whomever you have labelled as ‘reckless’.

Get a job (as per the standard dm rhetoric).

Get proper advice first but yes, seems the most logical thing to do.

@Dinoteeth oh yes get a job for £9.50 while two toddlers are stuck in childcare all day which btw costs £120 for 2 kids all day.

OP woild make a lovely profit of -44 pounds

It didn’t take long for the punching down threads to start. I’m claiming benefits OP due to a chronic illness not recklessness or lack of hard work. Would you care to swap?

You take my life changing illness and I’ll take your mortgage and £30k of savings. You also have to take my constant worry of when such benefits are going to be snatched away without a moments notice. It is not a way to live .

Be very careful and get advice first. There are several things you need to check. Two have been mentioned but benefits differ between house owners and renters. Renters get help with housing costs, owners don't get help with the mortgage (might have changed in last couple of years). You might be better off/less stress just going out to work.

Where has the OP called you or other benefit claimants reckless? Or even implied it.

What?

I'd do the same!

Replied to the wrong pedson