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 disagree.

very sensible in my view

This is what I posted earlier. Sure a mortgage is a DEBT ie money owed to the bank/building society and paying a chunk of it off isn't deliberately hiding assets ie buying cars, sovereigns or sticking cash in a safe.

Don't know what people are talking about , UC won't expect the op to look for a job if she has 2 toddlers and her partner works full time

Don't know about deprevation of assets though

Go for it.

An alternative (or parallel idea) is to set up a pension and channel some funds into it. If you are not working though you can't put more than a few k in per year

Everybody would wether they would admit it or not . Think of the expenses scandal and don't worry about it . Just do it .

Well there are lots of tax loopholes that people to whom 30K is loose change (Akshata Murty) happily exploit, I couldn't get worked up about this.

I think it's generally a good idea, things I'd think about are leaving a decent savings for an emergency and what the chances are if you going into negative equity and not being able to remortgage to release capital again if needed - but it seems pointless to have it sat there.

I think it's a good idea. It would also reduce your outgoings in terms of your mortgage payment.

We're in invidious financial circumstances right now - you look after you and yours. Don't mind the sneers of the small-minded.

Exactly. And as far as I'm aware, as long as your household is earning over a certain threshold, OP wouldn't be expected to look for work until the DC were quite a bit older if ever.

Or you could just get an evening/working from home part time job. I would rather do that myself.

She will be expected to look for work when youngest is 5

Than what?

You need to check with your mortgage provider how much you can overpay in a tax year. It is usually only 10 percent. You would need to find out what 10 percent is and pay that off in this tax year. Then as soon as next tax year in April 6th pay down some more. You could keep under £16k in your bank saving account. If you did it now in November you may be able to claim after April 2023.

It does make me laugh the idea that people are wildly affronted by a family with an income of 24k and 2 young children paying off their mortgage, when there are MPs all over the country claiming second home expenses, every single bill as an expense, heating their horse's stable and claiming it on expenses etc, plus all the tax dodging...

We're living in strange times. Put yourselves and your families first when it comes to finances.

You can get UC up tp £16k in savings I think however the more savings you have the less UC you get.

If I had £30k I would put it into my house anyway, thats more than a nest egg and paying off morgage is probably the best thing you can do.

Completely know where you are coming from, I’m person A as well. I worked really hard so that I could save enough to retire when I was about 60-62ish. No fancy holidays or new cars. I was 51 and had around £70k in the bank when I was involved in a rta (not my fault) and had to give up work. I got £50k from suing the person at fault, but after I paid back my work, sickness benefits, treatment costs and solicitor I was left with just under £20k for my life being ruined!

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.

Really wish we had had bought that nice car, did those home improvements and had those lovely holidays, when we could, instead of saving for our future. When I see those who have spent every penny they earn on these type of luxuries, because “what’s the point of putting money in the bank, when we can enjoy it and we’ll get benefits if anything happens,” I do feel very bitter!

It really sucks that you lose out if you try to help yourself and save for the future. Savings are going down fast, but it will be a few more years before I can get any help with benefits.

I don’t think you are immoral at all op.

You’d be surprised at how much childcare UC will cover. Single parent, 2DC, I work.

OP,

I will give you the advice that I gave to my 17 year old self when I was down on my luck (mum died suddenly, parent met step mum, kicked out at 18).

Do what you need to do to survive, so long as you are not directly hurting anyone.

Right now, things are shit. My family now pays a lot of tax. I don’t begrudge it going to people like you.

As if! Come on.

People really need to understand basic finances. A mortgage is a debt, a loan against an asset, cash is also an asset. Using one asset to pay off a debt against another is not deprivation assets. E.g.

House £200,000
Mortgage £100,000
Cash £50,000

Net position £150,000

House £200,000
Mortgage £50,000
Cash £0

Net position £150,000

Key point there - SINGLE parent

Go for it.

I'd do the same but have way too much savings....

And earn too much...

Not really, doesn’t matter if you are single or not, universal credit pay 85% or childcare up to £1108 a month for 2 children. But I come can reduce the amount you actually receive of course.