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?

The savings threshold has always been the cut off point. Right back to the days of income support. ( I had to claim for a short while)
It's not a new rule for UC

When people spend money like person B in your example then they are paying VAT, therefore they have paid more into the system so it doesn’t matter if they get a little bit more out.

There are kids in this country who go to bed hungry ffs.

Live off your savings and count yourself damn lucky

How do they know what you are saving for? unless its in a specific account such a first time isa, for all HMRC know you were saving for a rainy day. Such as one of you losing their job

I appreciate you feel a little disappointed OP but you really need to alter your thinking. Be thankful you saved the money, whatever the original purpose, and that you now have it to fall back on. Imagine if you had bought the house, I doubt UC would have been anywhere near enough to keep up the mortgage payments.

I personally think the disabled and people who have paid tax into the system should get more than the minimum. We need to make working pay really.

I agree with you. We’ve got over £16k saved because we had just added 5 years on to our mortgage and released some money. We’ve got to pay that mortgage back. It’s not savings as such and it was ear marked for specific home improvements some of which we’re obligated to pay as the work had been started.
I’ve had very little help from the government, I was self employed (not sure I can say am, there may be no business to salvage after this) and had a maternity leave 2 years ago so I’m not exactly rolling in what I was given. Nice to know after all our years of paying tax, in our time of need we get basically get told you’re on your own.

So someone who's been working on lower wages and unable to save should pay for you to protect your nest egg or it's not fair? Right. BS. YABVU.

Two couples have 25K.
Couple A buy a car for 10K. Their assets are still 25K. 15K cash + 10K car.
Couple B do not buy car. Assets remain 25K.

Couple A are financially supported by the rest of us. Couple B is not.

Is this fair? No, of course not. But not for the reasons the OP is claiming. Neither should be supported. Why should people with overdrafts, credit cards, debts, pay for those with 25K of assets?

Just over? Spend a few hundred and you have no problem 🤷🏻‍♀️

It's very unfair that people on the old tax credit system really can have as much in savings as they like and still get money given to them - they only need to declare the interest earned (which is probably most likely nothing at the moment) yet people on UC are penalised for having savings over 6k. If we lost our jobs tomorrow we would get nothing from Uc despite having 3 dependent kids because DH was unfortunate enough to lose both his parents and inherit above the threshold. I guess people would say we should use that to live on but really it is the only bit of security we have for retirement, neither of us have much in the way of pensions and we have 3 kids to help through Uni. We have never claimed anything except child benefit , have always worked around each other when the kids were young, me working nightshifts and never claimed barely any help even with childcare costs, worked all hours doing overtime to pay the mortgage and not rely on benefits. It is unfair in my opinion.

Op , once your savings fall below 16k you will be able to claim UC, it will reduce by £4.31 for every £250 you have over 6k.

I also don't think UC is bad at all for people earning and who get the work allowance. It is very poor for those with no earned income, especially single people and those private renting, but if you are working and get the work allowance on your claim I have been surprised at the amounts that people get particularly with the recent covid increase.

You can get a lot of other state benefits without being means tested.

State pension and PIP, for example. This is very unfair that the super-rich can do it.

Witches - exactly. In my job I regularly see very well off elderly people with savings in excess of 100k claiming Attendance Allowance because it's non means tested.

Is this the first time you've realised Universal Credit is unfair?

@AnotherEmma they don't ask for bank statements when you apply for means tested benefits they simply ask if you have savings and how much.

I see your point OP. I would need 20k min deposit to buy a small house in my area but I can't save enough whilst on UC despite being a full time degree student and working part time in order to get off benefits because I'll be penalised for it. In fact the only savings I've been paying into whilst on UC is my sons ISA because it's not my money and it can't be touched until he is 18. The system does in this way actively discourage you to save and means a lot of low income families (even those who work!) are unable to save towards a deposit for a property, meaning low income families are far less likely to ever own a home. Tories keeping the lower classes in their place as usual! Just because people are struggling far more than you doesn't make it any less frustrating that you've saved specifically to buy a home for your family and now are expected to use that money when you've done the responsible thing.

Agree with others that people didn't care about this sort of thing until it affected them, though I don't expect after this is all over it will be remembered, people will be back to talking about how those on UC get way too much already and are able to afford all the smartphones and booze they want because they get free school meal vouchers

The main thing that really annoys me though is that had we claimed benefits in the longer term and still been on the tax credits system you could inherit money or have savings and it would barely affect the benefits you receive, but on UC you would not be able to claim at all, similar to how if you want to become a student on Tax credits, your can keep all your student loan money ( or choose not to take it and live off your tax credits), yet on Uc you have to take any student finance available to you and it reduces your UC pound for pound. It's the absolute unfairness of these differences between two families that is infuriating and so unfair, meaning one family could be hundreds of pounds a month better off than another purely by which benefit system you fall under !

It's extremely frustrating @babyroobs, I'min the process of taking the student issue to tribunal to request a change to the guidelines. It's completely unfair. Under the UC system I have no choice but to claim the 'unemployment' part of the benefit (and to get it in the summer look for work for 3 months whilst apparently pulling childcare out of nowhere despite my student finance covering me during that time and me not wanting that element) whereas previously I only claimed HB and CTC because I didn't want to claim income support/jobseekers when I didn't need it yet I'm over £400 worse off every month despite technically being entitled to more. It's a joke!

@WitchesGlove

You can get a lot of other state benefits without being means tested.

State pension and PIP, for example. This is very unfair that the super-rich can do it.

The state pension is contribution based and unlike UC and tax credits is added to any other income and taxed. Any income based benefits for people over pension age like pension credit is subject to the same rules when it comes to savings although the threshold is higher, the same proof is required, and the deprivation of income rules still apply. As for PIP that's getting harder and harder to get now. I knew someone would mention the disabled and pensioners, surprised its taken this long TBH

the thought of us having to use at least a grand of our house savings on necessities just because we chose not to spend the money sucks

Because you feel someone else is getting more than you?

If we didn't have a welfare system, you'd expect to spend your savings when you hit hard times financially - that what savings are for, to spend at a later date when needed.

If someone is bad at budgeting and has no savings, should their DC starve?

I also think the notion of this mythical benefit claimant buying luxuries with all their thousands of pounds of savings is bollocks. For most people who can't manage to save an emergency fund and end up on benefits, it's because of things such as (1) having crippling debt obligations where they can barely keep their head above water (especially in circumstances like when a 0% balance transfer expires if they haven't managed to keep up with it and pay it off), (2) having to replace the washing machine or deal with other unexpected household emergencies, (3) not earning enough to make ends meet in the first place, (4) having to rent privately because there is no social housing stock and falling more and more into debt to keep a roof over their children's heads, and (5) having to pay for food for DC who are home all day because of lockdown.

You think you're getting less than this frivolous person living a lavish lifestyle, but you made this person up. The fact you believe that's how someone in poverty ends up claiming benefits with no savings merely exposes the blindness caused by your financial privilege. It's all rather Marie Antoinette.

I get that it's difficult to accept that you have to join the benefits queue with all the people you were judging before you became one of them. But demonising this nasty stereotype to differentiate yourself from 'real' benefit claimants ('you know; the scummy kind, not like me') makes you come across as spiteful and prejudiced.

You should be grateful you have access to benefits, not complaining that you have to support yourself until you can't anymore, just like everyone else.

@Babyroobs

The main thing that really annoys me though is that had we claimed benefits in the longer term and still been on the tax credits system you could inherit money or have savings and it would barely affect the benefits you receive, but on UC you would not be able to claim at all, similar to how if you want to become a student on Tax credits, your can keep all your student loan money ( or choose not to take it and live off your tax credits), yet on Uc you have to take any student finance available to you and it reduces your UC pound for pound. It's the absolute unfairness of these differences between two families that is infuriating and so unfair, meaning one family could be hundreds of pounds a month better off than another purely by which benefit system you fall under !

That is always going to happen when there is a changeover because it's simply not possible to move everyone onto the new system on Day 1. Its not a deliberate decision to treat people differently. Everyone will eventually come under UC rules.

This is what savings are for. Yes you had earmarked them for a deposit but if things change and you got a bumpy patch you use your savings to survive. It feels crap but it’s what you are meant to do.

I have to admit this new wave of people being outraged at the UC rules because they, or someone they are close to, is having to claim it is really grating.

People have voted in governments who have made these rules. Everyone knew that a Tory government was going to mean less of a welfare state.

Many folks who fell for the "easy to scam" and "Lazy scroungers" rhetoric were actively pleased by the changes even though many people pointed out the flaws along the way.

People being made redundant today are no more (or less) worthy of help than someone who was made redundant 6, 12 or 18 months ago. The fact folks didn't think it would happen to them is exactly the same as those made redundant 6, 12 or 18 months ago. They also had to use their house deposit or rainy day savings because the benefit system is a safety net for those who don't have anything for a rainy day.

You can get a lot of other state benefits without being means tested.

State pension and PIP, for example. This is very unfair that the super-rich can do it.

Have you ever applied for PIP?

Honestly, if someone doesn't need the money, why would they put themselves through that? I can't imagine many of the super-rich are trying to navigate that system for fun!