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 agree. However this is different (whilst related) and does not address someone who chooses not to work and requests a top up in state benefits.

It's not deprecation of assets to pay off your mortgage.
However being a SAHM is a luxury that you should be able to afford alone, many couples work opposite shifts if they can't afford childcare, it's just how life works.
I'm sure we'd all love to stay at home but if your partner can't afford for you to do that then you should step up. The cost of living crisis is affecting everyone, but we work to get ourselves out of it, not try to think of ways of getting benefits.

Wait can you claim benefits , to pay for your mortgage to live in a house you own :o

There was a radio phone in today discussing pensions and if they should be means tested. Interesting views both sides but one held very strongly by pensioners seemed to be ‘they’d paid in’ so should get it regardless.

This reminds me of that. Lots of people on this thread will have ‘paid in’ far more than they’ve taken out, either so far or will ever. If everyone had the attitude of the OP there would be no coppers left - oh wait….

you used to be able to get some interest paid but not any more but you can get a loan but they dwp put a charge on your home so when it sells they get their money back with interest

those with mortgages really dont get help but those with rent do

as an example years ago my mortgage was £200 a month the identical house next door like me had 3 kids and was on income support

now income support would only pay £40 of my mortgage but would pay £750 for my next door neighbour through housing benefit

the madness is if i had defaulted dwp would of had to pay £750 a month to rehouse me,was madness and luckily i managed to keep my house but the system is crazy sometimes

OP is also forgetting about Person D - who decided that having a SAHP while the other parent was on a low income was too risky, and has been working nights/weekends so as to earn as much as possible without needing childcare. They are permanently exhausted, scarecely see their partner and don't see why people who chose not to work can now fall back on benefits.

I’m not sure why people aren’t quite as angry about private landlords receiving government money from housing benefit to pay off their mortgages on houses they don’t even live in.

In the not so distant past it was possible to buy a house and live off one person’s salary and have a nice standard of living in this country. The rise in the cost of living over the last 40 years with stagnant wage growth means many people working full time jobs can’t even afford basic necessities and yet here we all are sniping at people who dare to have children even though one of them at least works full time. It is not a race to bottom, people shouldn’t just be content having the bare necessities. It’s mad to me that the attitudes that brought in the workhouses are apparently alive and well in 2022 Britain.

I'm of the opinion that if you're entitled to it, why shouldn't you claim it? All respect to those who don't claim what they're entitled to for whatever reason but there shouldn't be bad feeling towards those who do.

I don't know the rules with regards to depravation of capital so can't say whether you'd be entitled or not. We have a little over 6k in savings so our UC award is reduced accordingly.

We have two children, one gets DLA so gets the UC disability element and I get UC carer element (but not carers allowance as I earn over the threshold.) We also have the rent element. We started our claim when I was on furlough, thinking it would be short term- we earn around 46k between us so certainly hadn't expected to still be entitled now! Some months we earn too much so get a £0 award, other months we receive up to about £300.

This is not OK. Why are people accepting this being necessary just to live?

Flapjackquack- because they have morals and expect a bit more from life but handouts , they want to achieve a higher standard of living and contribute to her/his development and society

@pompei8309 - You think people who work hard their whole lives and earn poor wages or spend time raising the next generation don’t contribute to society or personally develop? Shame on you.

I think 16k is the savings threshold? If someone can clarify for me? The problem you have though, is it's not just as simple as claiming benefits anymore, you will have to prove you are looking for work, and if you will be sanctioned of you turn down jobs, and as you want to be a SAHM it defeats the object of what you're doing.

How long before you children are at school? I would argue that because you really wanted to be a stay at home mum, your savings allowing you to do that is a pretty good use of them, is it no? Save a small amount in a rainy day fund, and then when your children go to school start building the pot back up.

Flapjackquack- those that have 30k in the bank and want to claim benefits?? you damn tight I do, proper piss takers

right

Well you posted this same question on Money saving expert and got the correct answer there with no judgement. Personally I think it's not morally right but then I've seen loads of posters with other scenarios doing equally piss taking things like the poster who bought a house outright with lots of inheritance and then claimed UC to live off. And not forgetting that thousands of claimants of tax credits can have as much in savings as they wish without being penalised as tax credits calculations are based just on earned income. I would say pay off some of the mortgage and keep savings below 16k then you might still benefit from some UC and still have a bit of a safety net. There would be some reduction in your monthly amount for any savings over 6k and up to 16k but you would still get a decent amount on such a low income.

No, it's not!! Your better off getting a higher rate in savings (than your mortgage rate). Saving the money at a higher rate, paying it off at the end of your fixed term.

Have you even read the thread?

So poor people are never allowed to own property?

mam0918- if you have 30k in the bank , you’re far from poor

YoSofi are you saying I am confabulating ? What ‘sector’ exactly are you employed in -

Then you had a bad experience with an over zealous work coach

No judgement from me.

My calculation of what you could get (without using an online calculator) assuming you paid down your mortgage so savings were below £6000.

£24000 gross is take home of £1695 per month approx (this may vary)

Assuming no help with housing costs, Work Allowance is £573 per month

You keep 45p of every £1 earned above the Work Allowance
So reduction of 55p in every £1.

Amount over Work Allowance is £1695 - £573 = £1122

£1122 x £0.55 = £617.10 reduction*

Universal Credit calculation

Couple over 25 (less if younger) £525.72 joint

First child £290.00. max if pre 2017 born otherwise only £244

Second child £244.58

Total (572 + 290 + 244) £1060.30

Less reduction for Work Allowance restriction £617.10*

Net maximum total £443.20

Using the online calculators makes it easier, but I prefer transparency so you can see how it is all worked out.

No she won't if the other parent is working full time

Not impossible. We are on this household income approximately, but get CB, CTCs and the Scottish Child Payment. I am a SAHM. It can be done.