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.

you need to read up on the latest info, but I think you can have up to £16,000 in savings but for every £1000 you get x less in UC payments. Your plan does not sound like a terrible idea. You will also need to check with your mortgage provider re early repayment charges.

Why are you assuming shes only qualified enough to get a minimum wage job? She could be a doctor / Banker / professor for all you know! But of course, anyone who claims benefits must only be worthy of minimum wages.

She doesn't need to pay childcare if she works opposite hours to her DH. It is quite common to do this. I would rather a small wage than be at the mercy of a sanction from UC.

Your posts come across as really smug.

Reckless is subjective, some would say having two children is a massive luxury that they couldn't stretch to.
Some would say that upsizing isn't reckless considering how much less you would have paid over all for your larger property if you have snapped it up years ago, some say the best thing they did for their finances was buying the largest property they would need as soon as they could, I'm assuming you had that option and decided not to since you are patting yourself on the back now for that being the 'sensible' thing.
Some (many) would say that reducing debt and therefor interest you will pay over all is very far from reckless and it's far better money management to overpay your mortgage (mortgage terms allowing) than it is to leave it in a savings account.

I think £23,000 a year is approximately what a family of four would get on benefits would get, if that's including rent, though in many places a lot of that would have to go towards rent as well, because the benefits don't cover it all.
They'd get a lot less if rent isn't included, of course.

You don't have £30,000 of savings, stop calling it that!

You have a DEBT you haven't paid off yet!

Because the government no longer pay mortgage interest (they expect you to ask your mortgage company to suspend payments/mortgage holiday) the ONLY WAY you will be able to live in your house and be a SAHM for a little longer will be to do this

Massive CUNTYNESS on this thread

Entitled to makes it £432 a month

You are wrong, no rent or childcare costs, on 24k, they just wouldn’t get that much. It’s pretty easy to work out.

Childcare costs are far too high in the UK.
People "choose" to have children but do we really?
It's in most of us, as humans, to need to have children.
I do not think that having children should penalise parents and ESPECIALLY mothers over their career choices and promotion opportunities.
Many women who want to work - cannot - for many years - because of the cost of childcare.

It is short-sighted of the government not to encourage more affordable child care provision from councils and workplaces.
OP could go back to work if she could afford the childcare and not have to lose what she's worked for already.

Many women on low incomes don't have a choice whether they work or not.

What a really interesting question! This is what the DWP's ADM A(dvice for decision making) Chapter H1: Capital says:

The law
H1795 The law says people are treated as having capital they do not have if they deprive themselves of
capital to get UC or more UC1
. The capital people are treated as having is called notional capital.
1 UC Regs, reg 50(1)

H1796 People are not treated as having capital of which they have deprived themselves if

1. it reduces or pays a debt owed by the person or
2. they purchase goods and services and that expenditure was reasonable in the circumstances of that

person’s case1 .

Goodness OP we both earn a lot more than your DH and still have to dip into our savings from time to time, that is what they are for. Prices are rising for everyone not just you. So you want to move to a bigger house? Poor diddums.Go get a job or get your DH to get a better paying one.

I would assume that if OP was originally the higher earner she wouldn’t be staying at home but there is nowt as queer as folk.

Quite apart from the question of deprivation of assets, I wonder if it will be more difficult for you to secure a bigger mortgage in the future if you decide to claim means tested benefits. I imagine it would raise questions about your financial acumen.

Only on mumsnet would a poster call the OP smug when her husband works full time for £24k supporting a family of 4.

Paying off debt is not considered deprivation of assets for Universal Credit.

Notional capital
50 ....
(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a)
reducing or paying a debt owed by the person; or
(b)
purchasing goods or services if the expenditure was reasonable in the circumstances of the person's case.

Now this is a judgemental post. No claiming benefits does not show you have poor financial acumen. Christ.

www.legislation.gov.uk/uksi/2013/376/regulation/50

A low income young family paying off a proportion of mortgage at a time of rocketing inflation rates would NEVER EVER be regarded as intentional deprivation of assets by DWP.

Wall. Bang. Head.

Your not rude, your right.

She also doesn't need to pay childcare if she clears the mortgage and claims UC. If she is entitled to it why shouldn't she - she would have lots more time with her kids when they are young and she wouldn't need help with the housing element of UC seeing as she would have secured a roof over her head by being responsible and putting earned money towards housing costs. As she says, if she had spent all the £30k on holidays or a bigger house in the first place she would be entitled to benefits, so what difference does it make?

@Newtonsnipple

i have a friend that keeps throwing his toys out of his pram & saying he'll just say 'fuck it' & claim benefits. They'll just pay him more benefits & he won't work again!

for context he's 62, owns a very small business that really suffered during the pandemic & isn't really recovering. He hates the work.

he gets child tax credits & housing benefit, reduction in council tax & lives in a housing association property.

he has been told he has to go onto UC credit instead by the end of 2023 (though I'm confused if that's still the Govts plan or not & which he'd be best in?

He has PTSD so he thinks he'll just be able to say he can't cope working anymore (it's not far from the truth tbh) and he'll get more benefits & that'll be that.

I've tried to explain it won't be, that I 'think' he'll have to go to the job centre when they demand & see patronising 12 year olds to explain himself. Have a set number of jobs he applies for & they won't much care how suitable he is for them.

etc etc, but it's not sinking in and I have to admit I can't be too forceful as I'm not exactly sure how they would deal with him. So I'm sticking with how stressful it would be to rely on ever changing, ever fragile benefits.

Well. They. Should.

Aside from the fact that it has been established that the law would allow OP to do what she is suggesting, you do know that not all benefits are means tested?

Exactly, and op you said you planned to be a SAHM on £24k between how many?

I get over 400pm in the same circumstances as the OP without rent so the posters saying she will get £400 - £500 a month UC with a couple and 2 DC to claim for is not inaccurate.

The difference will be my figure is after and not including my rent contribution so the OP's family would have a mortgage to pay from that. However £24 per year is around £1550 a month so with that plus child benefit for 2 children (£35 or so per week) plus UC, it's doable if you are careful and when one of you is a SAHP it is easier to be careful. There's someone to cover childcare always so the working parent doesn't have to worry quite as much about covering child sickness, it makes budgeting and meal planning easier etc.

The drawback is if you do this OP you are sacrificing your career progression, prospects and benefits. If your relationship ever turned sour you may well be stuck. You certainly won't ever be in a position of saving £30k again. There's a lot to consider even if it is fine to overpay your mortgage.