How would a £25k job affect Universal Credit and rent help?

[Hopingforhome]

Hi, I'm a single mum with a 3-year-old daughter. At the moment I work part-time and I'm receiving Universal Credit as well as help with my rent.

I'd really like to find a better job so I can apply for a mortgage, but the idea of losing my benefits (especially the help with rent) during the process really scares me and has stopped me from trying.

Does anyone know if your benefits stop straight away when you start earning more, or can you still get help with your rent until you actually buy a house?

Also, would I stop getting benefits if I found a job paying around £25k a year? That's about the minimum salary I'd need to be able to apply for a mortgage.

Thank you so much xx

There are many universal credit calculators online, try entitledto. However I'm not sure how your plan is going to work, do you have a deposit? Will your mortgage actually cover the cost of a decent property where you live? How will you cover maintenance costs?

Universal credit does not contribute towards mortgage payments so once you buy a house the amount you get will drop significantly.

This is what’s so broken about this country - OP is trying to work full time and better her prospects but could be financially worse off for doing the right thing. Cynics would say
It’s designed it this way to keep people dependent on the state and voting for the party who will give them the most benefits rather than the one that will cut government spending and grow the economy.

where I work we recently had a manager who as wife very sadly died. He’s resigned because with 2 young kids he’s better off on benefits. It’s not even worth working part time. It’s messed up

I’ve just done this calculator and still got a reasonable amount when I entered that I was renting. Plus you can claim childcare. Have a play around with entitled to and different scenarios. I think the main issue would be saving for a deposit as you can’t have more than £16k savings and it’s hard to save on low income and once you get your mortgage you won’t get benefits towards the payments.

You’ll still get benefits, and they don’t just stop. They taper down. But you will overall have more money if you get a better job than if you stay on benefits at part time. So get a better full time job.

But, once you hit £6k in savings, you will start to lose more UC on a taper scale and once you reach £16k, you lose all UC. So you cannot save up a deposit and continue to get UC.

This is all easily available online and you can use the UC calculator with different salaries to see what you’d end up with.

Regardless of any of it, when your daughter becomes an adult, you lose all child related benefits and will be massively fucked if you haven’t built up a bit of a career. You also won’t have any pension other than state pension. So, overall in the long run, your life will be better if you get a full time job and work at it. If you stay part time or low wages to keep getting UC then you are screwing your life up.

You are a parent. Think long term. Get a full time job and start earning.

A part rent part buy may be a solution here.

Thanks. I've had a look on Entitled and, according to the calculator, it says I wouldn't receive any Universal Credit. However, under the housing section it seems to suggest I might still get help with my rent, so I'm a bit confused.
Is it possible to get help with rent and childcare without actually receiving Universal Credit, or have I misunderstood how the calculator works?

You can only get help with rent via universal credit. There's tax free childcare and the free government hours

If you need help with rent how will you afford a mortgage ? Is the mortgage less ?

If you’re looking at a job paying £25k a year, before tax, and you’ve got a child and rent to pay then you should get something from UC. Your entitlement shouldn’t go to zero right away, you’d need to be earning a bit more to stop it completely. Are you sure you used to calculator correctly?

You won’t get the amount you get now, but you should still get help with the rent.

I did the entitled to calculation for where I live, and put the salary at 25k, one kid, no childcare costs, no savings and rent at £600 a month and it came out as a UC entitlement of £550 a month.
I made up a low rent figure as we don’t know what you’re paying but you should still get something.

You'd earn about £1793.45 after deductions. You are allowed £427 of earnings before deductions, then 55% is deducted after that, so you'd have £751.55 deducted from your Universal Credit.

Universal credit works on a taper system, so for every £1 you earn over your work allowance you lose some of your benefit, think it’s 55p so you will always be better off working. Depending on your total entitlement without work you can earn a lot before it becomes nothing.

The above is if you are renting. If you had a mortgage, you'd have £710 allowance, so £595.90 deduction, but no help towards your mortgage.