To think UC guidelines regarding savings are unfair

[dancinguser]

Prepared to get flamed for this and apologies if it's been done before but here goes.

So it's looking likely that DP will be made redundant within the next few weeks due to there not being enough work coming in to justify bringing back all of the staff that were working pre-lockdown.

I had a look into universal credit should this happen to see if we're able to get any support until he can find another job and we meet all of the criteria except "you and your partner have £16,000 or less in savings between you." We have been saving for a house deposit for 2 years and have just over £16k between us. Pre-lockdown we were viewing houses and have been waiting for the right one to make an offer on.

Now before the obvious is stated that we wouldn't receive support as we have money that others don't which could pay for the rent, bills etc. I've put an example below to explain why I think it's unfair -

Person A earns £30k per year, their outgoings total £10k leaving them with £20k. They spend a little of the money but put over £16k into savings for a house.

Person B earns £30k per year, their outgoings total £10k leaving them with £20k. They spend this money on luxuries such as a new car, designer clothes, a new sofa, the latest iPhone.

Both Person A & B lose their job. Person B receives UC to help pay their rent and bills, whilst sitting on their new sofa in their designer clothes with a nice car sitting in the driveway. Person A must burn through their own savings before being eligible for support, all whilst having 0 luxuries.

So whilst at face value it makes sense that people with savings pay using them, I find it ridiculous that two people who have had the exact same money coming in wouldn't receive the same support based on whether they are good at saving their money or not. Why are people who choose to save their money being penalised against someone who may have spent their money frivolously? IMO if two people both have had the same income they should be eligible the same support, AIBU?

People have been struggling on universal credit for a long time. Even the current payments don’t reflect this as the standard allowance was raised due to COVID-19 for example last financial year the single 25 year old + rate was £317.82. It was meant to go up to £323.22. for 2020/21 but due to coronavirus was put up to £409.89. Current law is that it reverts to lower level for 2021/22
Working tax credit was also raised.

If you've only got a little above £16,000 then you could lend a family member £2-3k to take you below the threshold before you apply.

I would say that most UC claimants would love to have £16k though rather than a small amount to live on each month.

@Lovely1a2b3c

If you've only got a little above £16,000 then you could lend a family member £2-3k to take you below the threshold before you apply.

I would say that most UC claimants would love to have £16k though rather than a small amount to live on each month.

That’s terrible advice. Deprivation of assets would cause a lot more hassle than bringing the amount down naturally then applying

To those flaming the OP for daring to be able to save and expecting something back in return for NI and taxes paid are part of the problem they are complaining about.

Has it ever occurred to you that the reason there is wider support for a welfare state in Germany and Scandinavia is because people who have contributed are eligible for support? They have a contributory benefits system in those famously right wing countries. We have a means tested benefits system, so we have just over half the population contributing to support the other (just under) half but those who contribute are eligible for nothing, or a small amount.

We did have a contributory system until 1979, when it became means tested. The architects of the post war welfare state understood the principal that in order for there to be wide spread support for a welfare state then everyone must contribute and everyone must be eligible for support.

Support for the welfare state has decreased since 1979 and those such as @AnotherEmma, who sneer at the OP, for daring to question why she isn’t eligible support, despite contributing, are just alienating those who are capable of contributing and encouraging them to vote in governments who don’t want a welfare state at all and act to dismantle it. Resulting in the issues @anotheremma has described seeing in her job.

I personally think we should try and emulate countries like Germany and Scandinavia, which would mean higher taxes (doesn’t necessarily have to all be a raise in income tax as we could look at a land tax for properties over a certain amount or a luxury car tax, for example). Germany and Scandinavia do pay out a higher amount to those who have contributed, for a time limited period, both because it is fair to do so but also because sometimes people are redundant as their skills are becoming obsolete and paying those people enough to cover their bills allows them to time to retrain and re-enter the workforce, becoming contributors again.

The other thing to consider is that those who contribute quite often only need short term support (due to redundancy during a recession or pandemic) as they tend to have built up the qualifications and experience to rejoin the workforce more quickly. In other words, they have no barriers to work, other than a recession / pandemic which are usually short term blips.

There will always be a section of society that requires long term state support but in order to provide this then we need the buy in from those that contribute. In my opinion, the way to get this buy in is to emulate countries like Germany and Scandinavia, if it works there, why can’t it work here? However the answer is not to sneer at those who have worked, paid taxes and saved.

@TazSyd

To those flaming the OP for daring to be able to save and expecting something back in return for NI and taxes paid are part of the problem they are complaining about.

Has it ever occurred to you that the reason there is wider support for a welfare state in Germany and Scandinavia is because people who have contributed are eligible for support? They have a contributory benefits system in those famously right wing countries. We have a means tested benefits system, so we have just over half the population contributing to support the other (just under) half but those who contribute are eligible for nothing, or a small amount.

We did have a contributory system until 1979, when it became means tested. The architects of the post war welfare state understood the principal that in order for there to be wide spread support for a welfare state then everyone must contribute and everyone must be eligible for support.

Support for the welfare state has decreased since 1979 and those such as @AnotherEmma, who sneer at the OP, for daring to question why she isn’t eligible support, despite contributing, are just alienating those who are capable of contributing and encouraging them to vote in governments who don’t want a welfare state at all and act to dismantle it. Resulting in the issues @anotheremma has described seeing in her job.

I personally think we should try and emulate countries like Germany and Scandinavia, which would mean higher taxes (doesn’t necessarily have to all be a raise in income tax as we could look at a land tax for properties over a certain amount or a luxury car tax, for example). Germany and Scandinavia do pay out a higher amount to those who have contributed, for a time limited period, both because it is fair to do so but also because sometimes people are redundant as their skills are becoming obsolete and paying those people enough to cover their bills allows them to time to retrain and re-enter the workforce, becoming contributors again.

The other thing to consider is that those who contribute quite often only need short term support (due to redundancy during a recession or pandemic) as they tend to have built up the qualifications and experience to rejoin the workforce more quickly. In other words, they have no barriers to work, other than a recession / pandemic which are usually short term blips.

There will always be a section of society that requires long term state support but in order to provide this then we need the buy in from those that contribute. In my opinion, the way to get this buy in is to emulate countries like Germany and Scandinavia, if it works there, why can’t it work here? However the answer is not to sneer at those who have worked, paid taxes and saved.

Great post

@TazSyd
"those such as @AnotherEmma, who sneer at the OP, for daring to question why she isn’t eligible support"
I am absolutely not "sneering" at the OP, what a nasty thing to say.

I don't suppose you bothered reading all my posts (it's a long thread and I've posted since page 1) but in my first post I gave the OP helpful information.

Pointing out that someone is fortunate for being in a position to save is not "sneering" at them, it's the truth.

Yanbu.

The system rewards people who take as little personal responsibility as possible & make poor financial choices.

It's because theres no other way to means test it and ensure that very wealthy asset rich people aren't abusing the system.

If he has paid enough NI then he can apply for new style job seekers allowance instead for 6 months whilst looking for work. This doesn't take into account any savings or household income.

@TazSyd

Also, a lot of PPs have made the same point about the OP being fortunate / lucky to have savings (of course it's also a sensible choice to save if you can, it's not just luck, but as I said it's a fortunate position to even have the option).

So why single me out when I've been engaging in the debate?

Someone else made this comment, but I'm the one who's "sneering"?
"Anyone with savings who pleads poverty can fuck right off as far as I'm concerned."

I've not followed the thread closely enough to have a view on singling out, but tazsyd's post contained some unpalatable truths about the need for people to buy into the concept of a welfare state for it to work, and what this requires.

I don’t see any sneering from @AnotherEmma.
@TazSyd it is definitely arguable that the UK government should spend more on benefits and a party advocating this might be more successful if it was seen to benefit those contributing. I don’t know enough about politics to know.

However until that happens I’d prefer means testing so that the balance falls in favour of those with less savings.

There are some who have squandered money, but the people I help are more often affected by illness/disability/PT looking after children. often having been one of the key workers such as carers or bin men, being cheered by others like me lucky to have a job where I can work from home. They may be unable to make enough contributions to get out of means tested benefits.

but the people I help are more often affected by illness/disability/PT looking after children. often having been one of the key workers such as carers or bin men, being cheered by others like me lucky to have a job where I can work from home. They may be unable to make enough contributions to get out of means tested benefits.

Did you miss the last paragraph of my post? I clearly stated that in order to provide support to those who require long term state support, we require the buy in of those who are able to contribute to the system.

[quote AnotherEmma]@TazSyd
"those such as @AnotherEmma, who sneer at the OP, for daring to question why she isn’t eligible support"
I am absolutely not "sneering" at the OP, what a nasty thing to say.

I don't suppose you bothered reading all my posts (it's a long thread and I've posted since page 1) but in my first post I gave the OP helpful information.

Pointing out that someone is fortunate for being in a position to save is not "sneering" at them, it's the truth.[/quote]
You have not sneered at anyone. You consistently give helpful , accurate advice on this site. I have no idea why you have been singles out as sneering ?

@TazSyd

but the people I help are more often affected by illness/disability/PT looking after children. often having been one of the key workers such as carers or bin men, being cheered by others like me lucky to have a job where I can work from home. They may be unable to make enough contributions to get out of means tested benefits.

Did you miss the last paragraph of my post? I clearly stated that in order to provide support to those who require long term state support, we require the buy in of those who are able to contribute to the system.

That’s what I was referring to in my first paragraph- get buy in to increase overall benefit spending by increasing the amount based on contributions rather than means test put that towards more on means tested benefits.

With the current level of spending my personal view is means test more.

Thank you @Lockdownlooks and @Babyroobs

OP, I wholeheartedly agree with you

I wish you all the best

There’s always a lot of sour grapes on the this topic. I’ve only read a few responses... what somebody decides to cut back on and save should be entirely their business especially when it means you can get yourself on the property ladder. BUT NO the government and some others would rather people remain in this vicious cycle.

Before I was a mum I used to work full time and I did a bank job along side I worked around 60/70 even during pregnancy. Now I’m a single mother and I still work but no where near those hours..... I’d do what ever it took to make sure I save OP and I wouldn’t give a hoot what anybody else thought!

@Babyroobs

Some people could potentially be paying £1200 a month rent in parts of London and the south East and another 1k a month in childcare costs, this would potentially wipe our even a decent salary with nothing left to live on if people could not claim help from UC ?

Exactly

@AnotherEmma

"I do believe savings to purchase a house should be treated differently to other savings."

Impossible to actually make the distinction when you administer benefits, though.

Not the same at all, but the government does already subsidise house purchase slightly through the help to buy scheme.

This could be easily solved if the person saving for a house puts it into an account and the money won’t be released until the person is ready to buy. Let’s be honest it’s NOT rocket science is it... the government does not want to benefit the people... and for people to pass their little nest egg down the line possibly (even though you may end up selling your property to pay for a care home later on in life) it’s an investment all round.

that's what most older people face who need to go into a care home.

@alexdgr8

that's what most older people face who need to go into a care home.

Yes I know I’m aware. My point was that’s it’s an investment the money will go back into the pot eventually...