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.

We made sacrifices so that I could be a SAHM.

This is the point for me. Being a SAHM is your choice, and now instead of getting a job a bit earlier than planned, you want the state to subsidise your choice. I am sympathetic to the cost of living, but the right thing to do is surely to get a part time job. Everyone is aware that most sectors are crying out for workers.

@lipstickwoman - see my post above. Childcare costs are crippling. A lot of SAHP don’t do it through choice.

Check you even qualify, without rent to pay it's harder to get uc

But I would also consider working evenings/weekends instead as you would be better off

Get a job.

I have no money, no savings, a permanent health condition which limits the hours I can work and can only claim a maximum of £334 a month on UC. Including ALL bills.

I am self-employed (which isn't going well, since the economy has tanked) and also looking for paid work every day.

If you do this you are FRAUDLENT and have no morals at all, whether you care or not. Good luck getting any money out of UC. GET A JOB. Or start spending your savings.

If your DH is earning you won't get anything anyway.

@Flapjackquack but surely benefits are for people who can't manage. Who need support. Not for those who just want more. Benefits should be for those who have no choice.. OP has said she manages AND has savings.

It's outrageous to think she's entitled to benefits.

I hate to tell you this but when I looked into something similar, I'm sure that it actually was considered deprivation of assets or deprivation of capital, I really hope it is different if you are putting it into a mortgage? I think it should be.

Am I the only one not seeing a ‘spiteful tone’ from the OP about those on benefits??

So? Some people (according to the OP) frittered away their money. The OP chose to have children. Why should anyone be more sympathetic about her not working and claiming benefits because of the choice she made when she has zero sympathy for people that she thinks are less worthy than her?

By the way, you will have to provide bank statements etc. You can't just rock up and expect a load of free money.

You can still exceed the 10% overpayment though, (or whatever % of the balance your mortgage lender will allow you to repay) you will just have to factor in the charge your lender applied if you go over the 10%.
Check the benefits calculator though, it's not a bed of roses.

@Herejustforthisone It’s relevant because I’m pointing out the reality of living on benefits.

@Herejustforthisone Not the only one no, but neither am I the only one to pick it up.

I'm fortunate enough to have never needed to claim benefits so I admit I'm pretty clueless about what's involved, but I've always assumed they were for the most in need/ low income families and that it's great we live in a society where financial support is available to those people. Someone sitting on 30k in savings doesn't sound like they're in the category, so the idea that money can be funnelled onto a mortgage specifically to you can claim sounds morally wrong to me.

How did you live a fairly decent life on £24k? I'm not judging at all. But I've been a lone parent with 3 young children and earned £24k (training to be a Solicitor) and it was HARD and most definitely didn't afford us a 'decent life'. But I guess that depends on your definition of decent? I was VERY frugal too, bills and essentials for the children. There were no luxuries whatsoever.

Regarding your question, your priority is your family and their wellbeing. Do what you feel is right and screw what total strangers on the internet think.

You need to separate the two issues. Using your savings to pay off some of your mortgage and your benefits idea.

I can't comment on your benefits suggestion. I think you'd need to research very carefully from qualified sources before you take such a step, its probably not as easy an option as it sounds.

Really you need to see an independent financial advisor and get the real facts and figures before attempting anything like paying off your mortgage with such a large amount of savings. Crunch the numbers. Once its in the mortgage, it will be difficult to take it out again.

It might be sensible in the current climate to use your savings to reduce your
mortgage depending on how much interest you pay. Have you done the maths on how much this would reduce your mortgage by? Could the interest on your savings now be higher than your mortgage interest? Could they be moved to a higher-interest account or put into your pensions? Are you getting the best tax option on all this? There used to be offset mortgages where savings could offset the repayments on mortgages. Do you have any other debts, HP, Credit cards, it might be better to pay some of those off completely as the interest will be high than your savings and might reduce your monthly bills that way?

What would happen in say, two/three years time if interest rates fell again - given that you are considering moving? How would that affect a future house purchase? It costs money to move house, surveys, removals etc. would you have enough? What if you suddenly needed to replace your car?

Personally I think it's a disgusting idea. Paying money off your mortgage just so you can claim benefits. But do it if you think it's OK.

I agree.

@lipstickwoman - in an ideal world yes but the UK has such low wages and high cost of living that it’s impossible for huge chunks of the population to get by without benefits, in work or not.

@GreenFingersWouldBeHandy if it falls within the benefit rules for acceptable use of capital, it is not fraudulent.

I think you would be better of getting a job working weekends and nights if you can. Your DH doesn't earn enough for you to stay at home from the sound of it.

She'll get a shock when she's denied due to deprivation of capital.

I'd do it too, it's win win as your mortgage costs will be lower. I'd be tempted to keep £10,000 in my savings though.

@lipstickwoman of course @BzzzzzOff is entitled to benefits! That’s the whole point. She’s forced to use her savings which isn’t fair.

You would be deliberately depleting your savings in order to claim benefits, so I don’t see how it could possibly not be considered deprivation of assets. You are choosing to be a stay at home mum even though your partner is not a high earner, which is totally fair enough… but that’s what your savings are for.