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.

How do we live in a country where people are so entitled? You're sitting on house equity and savings and you want the government to pay for you. I find that a bit embarrassing actually.

I don’t really understand having a large amount of savings and a mortgage anyway. You should be able to draw down if you need to. I’d do it.

www.entitledto.co.uk/help/deprivation-of-savings-and-other-capital-universal-credit

This might help OP

As an aside if you are looking to upsize presumably you will need to work at some point to be considered for the mortgage? There is no way we could apply with only 1 salary.

What did you work at pre-kids, @BzzzzzOff? Think I'd try to find a job I could work around my husband's job in the first instance.

Dh (who had cancer and had been unable to work for 6 years) died just after this so I get £210 a month pension from him, plus £320 from pension of my own. I can’t get benefits as they are means tested and I have/had good savings. If I pay off mortgage or put money into house improvements it will be classed as deprivation of assets, so I still won’t get help

@Whoopy you should relook into paying your mortgage off, people on this thread have posted about how paying off debt is not considered deprivation of assets so you should be in the clear there, if it would make things easier for you definitely do it!

How is suggesting to someone that they get a job, a 'race to the bottom'?

Its a massively luxury to not need to work outside the home. OP talks about being reckless and not sensible by buying a bigger house etc, perhaps she and her partner were reckless by having children and expecting to be able to manage them on one income? Its all about perspective isn it?

if you can get it then take it! Plenty of people do so don’t miss out.

My cousin has 2 kids and receives around £1500 a month plus council tax paid as well as cost of living. Works out the equivalent of slightly under £20k a year and will go up 10%. Also got both cost of living payments, free dentist, food vouchers etc

Both kids at school but she has no intention of looking for work whilst she can get this support.

I think a better solution here would be to use 5k of your savings to put solar panels onto your house; pick up a few hours whilst your partner is off to boost your income and plan to delay the house move for an additional year.

You'd come out the other end with most of your savings still intact and in a much better position to move once you're back working.

I think you may be a bit confused on the rules of benefits.

You can’t just be paid to be a SAHP.

If your children are under 2 then you won’t need to work but as soon as they’re over that, you will need weekly meetings to look for work and prove that you are applying for jobs.
If you go too long without securing a job you will be expected to do volunteer work.

So surely it would be better to just get a part time job?

I personally don’t see the point in having £30k savings if you’ve got a mortgage so I would definitely use it to pay some of the mortgage off.

Being a SAHP is a luxury.
If you can’t afford it then you need to get a job.

You have been given the correct answer with the DWP regs quoted everyone screaming deprivation of capital doesn't understand the law.

Para 50
www.legislation.gov.uk/ukdsi/2013/9780111531938/part/6

Deprivation is when you spend money on non-allowable expenditure in order to claim benefit. DWP also have to show the intent, however paying off mortgage is allowable.

If you were on Tax Credits the 30k would be ignored so all the hysteria over claiming benefits with a spare 30k is just tosh. It's the system that has changed.

Person A with 30k in the bank can't receive UC.
Person B with 30k in the bank can receive Tax Credits and yes there are still many people on legacy benefits despite what mumsnet says.

I doubt you could pay 30k off without a penalty but depending on what that penalty is it may still be worth it. Speak to your mortgage provider, it will lower your repayments and in this climate with mortgage rates climbing it makes good sense and then you can claim UC.

The worst UC can do is treat you as having the capital and refuse and then you get specialist help to challenge it.

The purpose of benefits is that they exist to help people who run into hardship and do not have the ability to pay for essentials like food and warmth. The idea is not that people conceal or move their wealth around to try and qualify for handouts.

The sort of person that would try and get away with this is a morally bankrupt parasite. Ask yourself if you are that person. If you are then knock yourself out but I hope you get caught.

@CarefreeMe I think you may be a bit confused on the rules of benefits.
You can’t just be paid to be a SAHP.
If your children are under 2 then you won’t need to work but as soon as they’re over that, you will need weekly meetings to look for work and prove that you are applying for jobs.
If you go too long without securing a job you will be expected to do volunteer work.

I trust that you are not a benefits adviser or work coach, and this is hearsay.

@CheesenCrackersmm get caught doing what?

Get a job. Your husband needs to earn more.

Delighted to be paying higher rate tax as a lone parent so that couples can get benefits to be stay at home parents. And also that the benefit bill is using income that could be used instead for Education. DS is currently unable to attend school due to lack of SEN facilities. So juggling him at home, with a full time job and battling with the LA.

But please defund yourself of assets so my tax contributions can pay for you to stay at home.

I'm sick of being penalised for being responsible with my money

No one's penalising you OP, benefits are there as a safety net, not to enable you to be a SAHP AND to enable you to upsize your home

AFAIK once your youngest turns 3 you need to start job hunting on UC. Or did you think they would stop "penalising" you until your dc are 18?

If a household with 2 adults in it earns over a certain amount, then the non working parent will not have to look for work even when the children are over the age of their parent being able to stay at home without looking for work.

It's interesting because while in some situations being a SAHP is a luxury, in others it's a necessity because the cost of childcare can far outstrip low earnings.

I have no problem with people doing this. The rules are the rules.

If MPs can claim £200k a year in expenses and the likes of Matt Hancock can give billions in contracts to his mates - then why shouldn’t ordinary people look out for themselves within the rules and within the law?

In fact, if you find you have disposable income at the end of each month then put it into a pension. The government will give you 25% on top and it will reduce your income which in turn will increase your benefits.

The savings are for property, so there is no difference between it being in a savings account or off your mortgage, except you will have a lower mortgage payment each month - important when mortgage rates are increasing.

I trust that you are not a benefits adviser or work coach, and this is hearsay.

No I just know from experience.

Not only that but they have made a lifestyle choice to either have two children very early in their lives or rely on one low income.

The choice to not either upskill/ chase promotions/ work unsociable hours for more pay/ put in overtime/ work outside of your desired profession that you would enjoy being in is a complete luxury when you have an unemployed person in your household, able to hold down all of the childcare and domestics.

These are the types of decisions unavailable to single parents/ carers/ people in poor health, they are absolutely available to this woman's husband since they planned she would be at home. Bazaar lifestyle choices from the sensible not reckless there.

They start reducing the benefits amount after £6k but not by a huge amount. I have £12k and lose £100 a month off our entitlement.

I’ve just read your very informative update which is highly relevant to the OP’s query.
I’m happy to stand corrected and learn something new… thank you!

hmm this case is not the same but may help
was on income support with children not in work and had a endownment pay out 40k cleared the mortgage 27k and paid a debt and some home improvments and made the rest under 5k didnt stop income support and ended up mortgage free all ok'd by the DWP

When l started claiming CTC and WTC, l didn't have to provide bank statements. When l get moved to UC, will l have to then?