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?

I sympathise, saving for a house deposit is a long hard slog and it must be upsetting watching it slip away.

Do you have some emergency fund savings? I think it's wise to allocate your first chunk of savings to this. So say £3k for a rainy day, like this, and consider the remaining £13k your deposit money - feels like you're not spending the specific house savings then once you've spent that you'll be eligible for state help?

Definitely wise to have emergency savings when you buy your house as there is bugger all help available then, at least eventually you'll get some rent support now.

Hypothetical question, how do they check the savings? I probably have 15 bank accounts I'm constantly moving money around in, you couldn't just look at one statement and see 16k sat there. So how does that work?

Furlough funding is a huge amount of debt for the government to have taken on. It has to stop, how many generations will have to pay for it?

Have you checked you would be eligible for UC anyway as your income is taken into account? Are you council or private rent? So you have children?

You think you're getting less than this frivolous person living a lavish lifestyle, but you made this person up.

The maths didn’t even add up.

This is why savings were not counted before.

Problem is more and more people would claim tax credits for years, then come into money, inheritance, or even building up good savings because of the scale of benefits they received, or through divorce, yet continued to claim for years, so this had to be changed.

Sadly very unfair for people in your circumstances.

OP you mention it is unfair, how about we measure up together?

I'm disabled, poor genetics that were a ticking time bomb in addition to my ASD, which has also given me the combination of severe anxiety, depression and near agoraphobia on top of my additional diagnosis that pushed me over the threshold in needing care occasionaly and hospital visits/stays in mental wards. Again I'll reiterate this was all beyond my control.

Now because people like yourself, and I honestly dont mean this in a horrible way, unaware that it would ever affect you chose to swallow the narrative that the MSM were pushing at the behest of the Tory government that benefits claimants were scroungers so they passed the 2012 Welfare Bill, it has made living on benefits close to being 1 of the hardest things I have had to do in my life because I have no choice, people have commited suicide or starved to death on this very punative benefits system.

You have 16K at your disposal. I'm overdrawn by £1.28, because I'm on benefits youre also not allowed an overdraft so expect my account to be closed. [shrug]

Go on OP tell me how bad youve got it again

Benefits are there as a safety net for people who need money. Yes, it may be inconvenient for you to have to use your savings pot, but hey, life deals crap cards sometimes. Hopefully you will be able to resume employment soon and continue to save.

Benefits are for people who have nothing to live on, you have over £16K to live on so yes YABU.

I get it, as I was made redundant in March, so I've claimed new style JSA which isn't far off the same amount. If you've paid loads of tax and NI, that's what it's for!

We’ve had to use savings during the crisis as DH is SE, savings that were earmarked for an extension but so is life bills needed paying etc. I didn’t come online complaining that we couldn’t claim benefits and had to use savings to live because I’ve got some self awareness of what’s going on in the world and how lucky we are compared to other people! You’re being really selfish, some people literally have nothing, it’s taken a premier league footballer lobbying the government to make sure that some kids can eat this summer, that is the severity of the situation and your complaining about not wanting to dip into savings 🤯

Hypothetical question, how do they check the savings? I probably have 15 bank accounts I'm constantly moving money around in, you couldn't just look at one statement and see 16k sat there. So how does that work?

Parkandride How do they check? Very carefully. You are asked to provide ALL bank and financial statements. If you dont, its potential fraud.

@BlackForestCake

Stash the excess in a foreign account, ideally well before you need to claim so that the movement doesn't show up on your bank statements.

If hiding your money is OK for the mega-rich, it's OK for the rest of us.

Then I hope you never criticise those companies again. You are just as bad as them

@hammeringinmyhead

I get it, as I was made redundant in March, so I've claimed new style JSA which isn't far off the same amount. If you've paid loads of tax and NI, that's what it's for!

Actually no its not what its for your NI contributions only count towards your state pension and cont based working age benefits, the amount of tax you pay and the amount of years you have paid in do not count and why should they, and I say this as someone who has paid tax for 50 years (in July) 24 of which have been at the higher rate.

@dancinguser Unfortunately there will always be winners and losers and you fall into the losers camp this time The state simply can’t pay for people who have their own savings (and why should they?) Having said that, I too would be raging if it was my house deposit rather than saving for a cruise so you have my sympathy.

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

^ This.

Living on UC has been one of the hardest things I have ever done. Each month my DP and I have to sit down, add up all our bills and budget accordingly. If he has a day off because he is sick, I will get a small amount more but not as much as the day wage he lost. We have to toe the line.

We are desperate for a second child, but after our first our financial situation changed so dramatically I would like to build our savings back up before that happens. We had £500 in our savings which I was extremely proud of, then our washing machine broke and our dog was sick, so bye bye savings.

UC makes people who are living in poverty toe the line. My DP got a better job, one that he can climb the ladder in and earn new skills and higher wages, but when his pay went up, my UC went down. Yet we still don't have it as bad as a lot of people I know on UC, so I'm happy with my lot.

So sorry but I'm not that sympathetic you have to spend your 16k to pay your rent and buy food 🤷‍♀️ Not when there are people who don't have that luxury.

@Brieminewine

Benefits are for people who have nothing to live on, you have over £16K to live on so yes YABU.

They're evidently not though, because you can have up to 6k saved with no impact at all on the amount of benefits you're entitled to, and then it's a sliding scale between 6 and 16k. If OP and DP had 15k rather than 16, they'd get a little bit of UC still. I assume we all agree that 6k is not nothing, and neither is £15,999.

Can homeowners claim universal credit? Is equity taken into account?

@Parkandride

They get all your bank statements. They can also call you in and criticise you over them if they feel like it. When I was on Housing Benefit and Carer's Allowance years ago I had to submit all my accounts (I worked as well and they audited me relentlessly) and bank statements and they would sit me down, in the public open room, and go through them. At that time, they could also covertly surveil you under RIPA, though I'm hopeful that has been curtailed a bit lately.

I had a takeaway from Pizza Hut for my birthday and the woman sucked her teeth and said 'alright for some'. I'll never forget it.

Tbh, if the UK system hadn't been so inflexibly built around home ownership and the 'property ladder', with the corollary that tenants' rights and protections are rubbish and they are societally discouraged from asserting the ones they do have (just look at threads by tenants on here), the OP would be unlikely to feel the way she does, and for this reason I do have some sympathy with her. The narrative of 'frivolous purchases' vs 'virtuous existing on beans to scrimp for a deposit and join the homeowning class' that her post reproduces is deeply established in British society. From OP's perspective, and steeped in that narrative, she's done all the right things and is now being punished. I do agree she's lost perspective, but it's a societally sanctioned/encouraged loss of perspective. I am guessing the architects of UC never expected it to apply in such numbers to 'people like her'.

@WaffleCash

Can homeowners claim universal credit? Is equity taken into account?

They can but not for the mortgage. So if a family had a couple and one child, they'd get the elements for the adults and kid but not the housing part.

@WaffleCash

Can homeowners claim universal credit? Is equity taken into account?

The capital in a property is ignored if it is your home. There are a few other disregards as well. other Property/land counts as capital. Homeowners can claim. There is no help on universal credit for a mortgage though there is a separate mortgage interest loan scheme.

www.citizensadvice.org.uk/benefits/universal-credit/on-universal-credit/check-how-much-universal-credit-youll-get/#h-3-make-reductions-for-your-income-and-capital

Benefits are to prevent hardship.

Where would the cut off point be if it was you making the rules, @dancinguser? Or would there be no cut off? So that people with £1 000 000 could claim UC? And if so, how would you propose that the government come up with the money to pay all the rich people their UC?

I wonder if you usually object to the £16 000 cut off, or if it's just now that it affects you?

"Can homeowners claim universal credit?"
Yes but not the housing element.
IIRC after 9 months you can claim a loan for help with mortgage interest... I think... but it's not exactly helpful

"Is equity taken into account?"
No, equity in a property that you live in as your main home is disregarded.
If people had a property they owned and rented out, the equity and rental income would be counted.
There are occasionally situations in which someone owns a home and rents it out, and rents the home they live in, and they lose out under the UC system as they wouldn't get the housing element. In that scenario I would advise people to sell the property - and the equity is disregarded while you're trying to sell it.

Nobody cared how shit UC was when it only affected poor people. This! You didn't care when poor people were starving to death, becoming homeless, having their disability benefits cut again. But all of a sudden you care because you don't want to dip into your substantial savings. Pathetic.