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AIBU?

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Original poster

Universal credit and saving for a house deposit

231 replies

Musereader · 24/10/2017 15:28

I am a single parent with one child, i could not cope without tax credits as my rent, council tax and childcare costs are more than my montly wage so i rely on the tc to cover the bills and food.

I do work in national goverment on the lowest rung in a call centre and have been looking through the releases we get and i am horrified to find out that you cannot claim UC if you have more than £16k in savings. Between £16k and £6k in savings does mean a reduction in UC. This is not the case in tc

A house in my area ranges from £150 to 200k so a 10% deposit is £15k minimum.

Basically as soon as i save any amount of money that looks like a reasonable deposit i have to use savings to pay childcare because my UC would reduce.

So aibu to hope that the goverment does do a uturn on UC roll out which may mean that i never have to go on UC and be subject to these silly savings rules

OP posts:
Ylvamoon · 24/10/2017 22:04

There is a difference between saving/ living and owning a house / flat. A property will eventually turn into capital. It often increases in value. (Although it is time for a crash in the housing market...)
There is a moral issue. This gained capital is directly financed by the tax payer through benefits, than everyone should be entitled to build capital with state help. Why should there only be help available to one population group and not the others? And where should we draw the line? 1 bed flat? 4 bed house? When are people responsible for their own finances? 16k? 20k 500k??

seasidesally · 24/10/2017 22:13

Well what about those with mortgages and have the state pay some of the interest some might say the state are paying for them to buy and probably gain equity

Should they have to sell

SunnySkiesSleepsintheMorning · 24/10/2017 22:15

Bollocks to the “not wanting people to better themselves”. If UC allowed you to save more, why are posters assuming that everyone will spend on a property thus apparently saving the govt in the long term? I could save £20k and blow it on a fuck off fancy holiday. Like me, many people still won’t be able to buy property even if they can save more.

Bufferingkisses · 24/10/2017 22:15

The moral issue is that people earning decent money need help because the cost of living is so out of tune with earnings.

Queenofthedrivensnow · 24/10/2017 22:21

Ylva - there is state help the help to buy isa - only caveat is that it has to be a new build

Pop24 · 24/10/2017 22:22

In truth it will barely ever be the case that families on UC would be able to save. The op must be very frugal. But are you really asking why low paid people should be entitled to help from the state? Because you can't fucking live in most places in Britain on a low wage. The housing market is broken, Britain is broken. The government chooses to/has to top up low wages to save businesses having to pay their workers a living wage, why I'm not sure but they must have reasons. If in a very very rare case someone wants to aim to eventually own their own home surely it's better off for taxpayers in the long run to not have to pay hugely inflated rents to private landlords. The government values home ownership enough to allow homeowners to claim UC, you can even get payments to cover your mortgage. Let's not forget benefits were and still are a safety net for many people. It wouldn't be fair to say ' oh you've lost your job, you ve got 100k capital tied up in your house, sell up and fund your own life'. It doesn't seem fair that young people (and yes it will be young people overwhelmingly) are not allowed to be low paid and save for a house. What happened to having aspirations?

Queenofthedrivensnow · 24/10/2017 22:27

Pop - agree with all of your post

Original poster
Musereader · 24/10/2017 22:27

I would consider any scheme that gets me closer to owning a home, be that a flat or house, garrett, maisonette whatever. The equity loan schemes look great - except that you can only buy new builds. There are new builds going up very close to here but they are twice the price of an ex council house hence no difference in the amount of deposit i need. Shared ownership yes if i could find any.

But all start with a single step, saving - and i currently only have the 400 from the one months pay ive had since coming back from maternity, it will take a few years yet for me to be ready for home buying.

OP posts:
HeebieJeebies456 · 24/10/2017 22:29

The 16k rule has been there forever - it's not a new thing.

Stillpissingdown · 24/10/2017 22:33

fatwedding are you TM in hiding ?? Grin

I call GF!

dataandspot · 24/10/2017 22:34

Pop

Did transitional protection not exist in your case as you moved from tax credits to UC with savings?

MyDcAreMarvel · 24/10/2017 22:36

Heebie yes for JSA, HB and IS but not tax credits.

Pop24 · 24/10/2017 22:37

Heebie the 16k is new under UC with regard to tax credits as capital was never taken into account. If we lived down the road in the next county we would currently be about £100 better off a month in child tax credit. Another unfairness with the roll out, post code lottery.

MyDcAreMarvel · 24/10/2017 22:41

Here is is little reminder from back in the day. When instead of forcing people into poverty, the government advertised on TV for people to claim their entitlements.
m.youtube.com/watch?v=8dllkfKg7B4

Pop24 · 24/10/2017 22:42

Op shared ownership would prob be a good option. We're looking at that but it's a waiting game for them to come up. Also the newer ones seem to have crazy high rents on the part you don't own but we are in an expensive area. It just gives you that bit of security. You probably won't make money and it's harder to sell so I'd only consider it if you're sure you will be there for the long haul. my mum has one and it's been great. Very affordable, efficient and cheap to run ect.

HeebieJeebies456 · 24/10/2017 22:42

You might just have to accept that you will never be a homeowner.
If you can't afford to work without claiming benefits, what makes you think you can afford to be a homeowner with a mortgage?

Unless you're buying for cash, you're basically 'renting' your house from the bank.
If you lose you job and can't afford the 'rent', you won't be able to claim housing benefit to help keep the roof above you head.
The bank will re-posess your house if you miss payments.
Where will you find the money for things like maintenance, repairs, replacement furnishings/white goods, insurance etc if you're relying on benefits to work a job with a low wage?

I think you need to focus more on re-training/getting a higher paid job right now and using your money to give yourself and the dc a better quality of life.

I rent and i will continue renting forever unless i win the lottery and can buy a house for cash.
I have more 'security' as a tenant, i don't have to pay for maintenance/repairs, my LL is responsible for the white goods and boiler so any replacements/servicing doesn't cost me.
My rent is in proportion so i use my earnings to enjoy a better quality and standard of living.

The majority of new homeowners i know are paying either the same or more than my rent per month towards their mortgage.

Pop24 · 24/10/2017 22:45

Dataandspot we never got to claim the tax credits as our area had updated to UC the week before we tried to claim 😩. Otherwise I think we would have had the traditional protection for 18 months or thereabouts...

Pop24 · 24/10/2017 22:51

Heebie renting is fine long term if your in an area with reasonable rents. Near where we work they are extortionate and a mortgage would be a lot less. Sadly that's the case in many places. But yes I do think the OP needs to focus on getting a better paid job. Unless you do surely you won't be able to borrow enough for a house even with a fair deposit?

Queenofthedrivensnow · 24/10/2017 22:56

Mortgages and rent here are about the same. Maintenance costs are a concern but you have to push forward if you can and have the choice

GabriellaMontez · 24/10/2017 23:04

People seem to think you have no right to be a home owner whilst claiming tax credits (that's what they are, they aren't actually benefits, or they weren't)?

So if, as a homeowner, you have a change in circumstances and need to claim UC should you be forced to sell your house?

Cantstanddisney · 24/10/2017 23:08

Op, have you checked the rules on how your UC would be reduced between £6k and £16k?

I’ve not looked into it myself but from working in housing benefit several years ago, savings between these amounts were subject to a”tariff income” calculation whereby the amount of savings you had was converted into an amount of extra income to add to your calculation. From my recollection, this was never a huge amount in the end. The only issue I remember was when the savings went over £16k..... however there were possible exceptions for if this was set aside for the onwards purchase of a property. Worth checking to see if any of these rules / calculations apply to UC???

Pop24 · 24/10/2017 23:13

Gabriella exactly.

seasidesally · 24/10/2017 23:13

It used to be for income support for every £250 over £6k they take £1 up to £16k

God knows what interest rate they were basing that on

Pop24 · 24/10/2017 23:15

There definitely aren't exceptions under UC for savings for a house.

fatweddingguest · 24/10/2017 23:17

Not a GF still Just speaking from my own, perfectly normal, life experience.