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'm guessing then that no-one on here took any tax credits when they had savings? Even though it was allowed. Great to know everyone ran down their savings before tax credit claiming....

I would not put it past the government to change the rules on this seeing as they have announced that they are making moves to get more people working. To be honest the current rules on this are ridiculous that the second person of a couple has no work requirements if the other is earnings some ridiculously low amount per month like £567. It's completely barmy when other couples not claiming benefits often have to have both working to make ends meet. I really hope they address this.

She is paying for it, she just wants a bigger house but doesnt want to work for it.

No. She has apparently given up on the idea of a bigger house, but will need more money for energy costs when her current deal comes to an end. It’s not at all about getting a bigger house.

I could never do that. It’s just so wrong imo.

We’ve got more in savings than the OP and overpay our mortgage every month. We’ve been in the situation, in the past, when our kids were very small when we didn’t have very much in savings and I used to dread the day our washing machine broke down or the boiler played up. I can tell you that it’s much nicer knowing, that whatever happens, we can afford to sort it out.

The benefits system is there to help people who are really struggling, not for people who choose to get rid of their savings so they can live off the tax payer. The whole point of savings is you use them on a rainy day.

"Greed and envy are unbecoming."

Pot meet kettle.

Yes, every bloody post, but WTF has that to do with you being wrong??

Yes that’s all logical and everything but we can’t demonise people using these reasonable arguments. After all only water and food are necessities 🙄

So you're happy to pay for someone to be a SAHM when they are able bodied, have childcare in the form of their DH, have 30k in savings, and are a homeowner looking to upgrade?

Wouldn't you rather it be spent on the NHS?

Agree.

Hey @BzzzzzOff, seeing as there is so much heat here I thought I’d really shake it up for people with an illustration of what I was saying about pension contributions.

First off, EntitledTo gave me a monthly UC payment of £397.67 for you.

Now, let’s say you didn’t need that money, you could get your other half to pay £666 a month into his pension (private SIPP for example) and then the UC payments would be £691 a month.

As a family unit you would be up by £25 + the pension contributions.

The £666 a month is £8k a year, which the government would add 20% tax relief making it up to £10k per year.

If this £10k per year was invested in a low-cost S&P500 tracker and if the average returns over the next 20 years were the same as the last 60 years average then that would 9.5% which compounds and after 20 years of doing this you would have over half a million pounds in a private pension all paid for by the UC/government tax relief. If you let it ride for longer, say 30 years it would be over £1.25 million pounds.

Now you know what the fat cats do with their money and pass it down through the generations as pensions are outside of inheritance tax so you could be making your kids millionaires by doing this…

But as others have said they will eventually start harassing you to get a job and as you say you might need some of the UC for higher energy bills.

You would be incredibly foolish, stupid, careless, to take yourself from a position of financial comfort with healthy savings and move into a place of financial need with tiny savings.
Your life will be significantly improved if you stop comparing your life and your situation with others. Your DH has a job, you are a SAHM by your own choice, you have great savings. Just live your own life and stop inducing self-pity.
We would all be a lot better off if people saw the welfare system as a support net for genuine need, rather than as an entitlement that they should claim without need.

I don’t get it. The amount of posts/threads where parents are decrying (rightly) the debt that their childrens generation are going to inherit - and then so many on here are saying “yeah, go for it”.

It’s not the government’s money they give away, it’s the taxpayers money.

That’s not to say I don’t recognise it’s a huge problem re work vs childcare costs. The OP’s suggestion might help HER for now, but multiply that by multiple households and all your kids will pay for it down the line.

It’s shocking that childcare costs place such a restriction on both parents working. But adding to the benefits problem is not the solution.

Sorry, that should have read “benefits bill”, not problem.

It’s your decision at the end of the day but I don’t actually see what the point of it would be? You’d be expected to look for work if your youngest is over 2? They won’t just pay you for being a SAHM. For the sake of £400 a month would it not be better to do a part time job at weekends or evenings? Even some bar or restaurant shifts would be more ideal?

The decision is subjective as it also mentions that there are different types of debts and some are not immediately payable as in a mortgage. There is also the test of the intent and if it can be concluded that securing benefit was a significant operative purpose. Which the poster says it is. But it would make sense to check your own circumstances first.

I desperately wanted to be a sahm and so I worked evenings shelf filling in a supermarket when DH was home and took on a bit of ironing and cleaning every week. Had to temporarily claim UC whilst in part time after DH died and couldn’t wait to get off it. Found it soul destroying with constant pressure to justify why I wasn’t working more hours at the most stressful time in my life. Not really a lifestyle choice.

@Futuristik - these are not mutually exclusive options. Previous generations managed to have both. I’d rather the government stopped giving massive tax subsidies to to their friends personally, but no I don’t begrudge someone whose partner works full time wanting one person to stay at home. We are a family where two adults work full time with a toddler, it’s stressful and it’s hard work. If someone has a way to get more joy out of life I say go for it. I bet half the people on here moaning about their money paying for it aren’t net contributors to the system anyway.

Well I certainly am. Additional rate tax payer. Don't begrudge for a moment contributing toward benefit for disabled, single parents, two parent working families, people's rent, even one parent working families where they're short on money.

But to pay for homeowners with 30k in savings. That is frankly insane, a huge waste of taxpayers' money.

Benefits are there for people who NEED them, not for people who would PREFER not to dip into their significant savings.

@Futuristik - good for you, I don’t begrudge my taxes being distributed to level the playing field for everyone. Champagne socialist and all that.

Absolutely this.

I think you'd need to send in 3 months bank statements with your claim (if not more) so I'd account for that when paying in and wait it out.

sorry, should have read the thread...

Go for it OP.

But be prepared you will be spending 35 hours a week looking for a job and weekly meetings in the job centre.

You also won't get any help with your mortgage because your husband is working.

And if you DO manage to get help with your mortgage, after being on UC for 9 months it will be a loan you will have to pay back, when you sell your house or after your mortgage ends.

So you will be paying the interest on a loan with another loan which will wrack up interest.

You don't need to work 35 hours until the youngest is 13