To think that universal credit wrongly penalises...

[User78890]

Posted a while ago about universal credit and savings... I can't get my head around it.

The rules are that above 6k you get deductions to your claim. The more you save, the more that gets deducted. 16k or above means that you cannot claim.

I am (hopefully) going to be training for a profession for a few years which will be a low wage. I'll have to rely on universal credit as my wage wouldn't cover childcare costs on top of everything else. But where does this leave those who want to save for a mortgage?

Surely anyone who saves will be in a constant cycle as you will then need to use your savings to live on, claim again, and repeat.

Before anyone jumps on me, I know benefits are for those who need it, and if you have savings, yes, you are obviously not in the priority of those who need it. But, those who spunk their money or use it wrongly are unaffected. Those who are trying to better their situation and are sensible, however, are in a constant trap. We are both equally entitled to the same financial help, but one is penalised and the other isn't.

So surely you would be best of spending your money, and you will never get a mortgage (unless obviously you was to secure a higher paid job)...

Why would you want to train for a profession which pays a low wage and needs topping up with UC? Don't do that, if a job is worth doing it is worth paying. Look around for other forms of employment that pay better and train for something that values your time and intelligence.

Well if you are deliberately choosing a career path where you will be low paid for several years, why should others support you when you have the means but decide not to support yourself?

I agree that it's harsh on someone who was about to buy a home but has been made redundant and has to use some of their savings, but that is a different position to the one you describe - you are making a deliberate choice. UC is there to help people who have nothing to fall back on.

I wouldn't be qualified so it is by no means deliberate. If you know of a job I can walk into without experience and having just graduated, which is above 25k, please do let me know!

Even on a good salary, with high rent prices and extortionate childcare fees, it seems unlikely a single wage would cover everything.

I agree with you when it comes to those who have saved for a house deposit and then lose their job, but it is absolutely right that it should be considered when people get inheritance or come into money by selling a second property.

I agree with you. I am on the old tax credits system and under that I was allowed to save for a house deposit. I work, I am a single parent, I don't see why I shouldn't try and make a better life by buying a house. Glad I haven't been switched to UC yet.

So where would you put the cap? Should someone on a low wage with a million in the bank be eligible to claim state support, which let’s not forget is paid for by everyone, it’s not the government’s money.

YABU. Uc is a top up benefit to ensure people have a decent amount to live on and provide basics. It isn't designed to enable people to save for a mortgage. The problem is that tax credits allowed virtually any amount of savings and only looked at interest on savings so people in the current climate with extremely low interest rates could potentially have 100k in savings ( assuming their earnings were still low enough ) and still get tax credits which most people would agreed is completely ludicrous. The system needed to change. The problem now though is that you still have some lucky people on tax credits where they can save for a house deposit and not be penalised, or can go to University and still basically get their student loan and keep all their tax credits , then you have those forced to claim UC whose student loans will mostly wipe out their UC entitlement and they are penalised for saving. I'm surprised there isn't more uproar about the unfairness of it all.

@growinggreyer

Why would you want to train for a profession which pays a low wage and needs topping up with UC? Don't do that, if a job is worth doing it is worth paying. Look around for other forms of employment that pay better and train for something that values your time and intelligence.

Eh? You think that trying to better yourself but starting somewhere is waste of time if it doesn’t pay well. Crap advice.

I think I remember your previous thread. Why start another one about pretty much exactly the same thing?
Legislation is what it is. People were unhappy about how the previous system was designed, and so a new one was set up which changed the aspects that some people kicked off about (i.e. buying a house while on benefits). It is what it is and I don't see it changing.
Everyone will be migrated over eventually.

It's because UC isn't meant to support the betterment of a lifestyle. It's survival money when you can't afford to live.

You would be training for a few years but not end up with a qualification? I would suggest a different profession. The benefits system isn’t there to help you buy a house.

I am (hopefully) going to be training for a profession for a few years which will be a low wage. I'll have to rely on universal credit as my wage wouldn't cover childcare costs on top of everything else.

But where does this leave those who want to save for a mortgage?

It leaves them in the same position as anyone else. If you want to be a homeowner you work for it. Deliberately training to do a low wage job isn't what people who want to get on the housing ladder do.

Surely anyone who saves will be in a constant cycle as you will then need to use your savings to live on, claim again, and repeat.

The cycle is a choice. People can choose not to jump in again.

@AnneLovesGilbert I do agree there should be a cap. But, surely to allow those who have been working to at least get one property (at a reasonable cost) before they then get penalised. There's a difference between being on a low wage and saving like mad, to inheriting 200k when you may already have a property.

So where would you put the cap? Should someone on a low wage with a million in the bank be eligible to claim state support, which let’s not forget is paid for by everyone, it’s not the government’s money.
Same as tax credits- interest on savings over £300 a year is counted as income, not the savings themselves.

Many people who do not claim benefits and pay tax are unable to save for a house deposit. It would be pretty galling if the money those people pay in tax is then handed out in benefits to others to be used for a house deposit!

@CrazyToast but it isn't. Its designed so that you work out better off by working, hence the work allowance. Its up to you what you do with it. I know of a few people who work part time and claim and have enough to be able to save at the end of the month. They are not strugging, but they choose to spend it.

@Babyroobs

Uc is a top up benefit to ensure people have a decent amount to live on and provide basics.
It isn't just a benefit that tops up some people's earnings. It is also a benefit paid to the unemployed and those who are sick.

The whole system is stupid.

We shouldn't be paying people wages below a living wage and then having the government top it up. Madness.

Buying a house isn't aspirational and isn't the best way to live, if we had this attitude we could be like all the civilised countries and treat renting as a valid choice. Legislate it properly, have long leases and secure renting. Make it a stable and safe affordable option.

But no, benefits should be for topping up in case of emergency or more in case of people with a disability. Not to fund people buying houses (except in case of people with a disability). If you're saving to buy a house, maybe you don't need benefits. I know it's frustrating in the current stupid system but there it is.

But where does this leave those who want to save for a mortgage?

Paying their own way with their savings, obviously.

Said as somebody who has been in receipt of benefits in the past (and bloody grateful for it, too). If you have over sixteen grand in savings, you don't need public money to prop you up.

Universal credit is a stop gap for people between jobs, its not really meant to provide you with an income to save for a mortgage.
Its great that you have savings, but there are plenty of reasons why other people don't that aren't because they have 'spunked' all their money away.
If you are in a position to retrain for a job that presumably you will enjoy, if you are accepting a lower salary ? then consider yourself blessed. Plenty of people don't have that opportunity.
I'm pretty much a live and let live person, but your post drips with so much entitlement its really quite offensive.

Why should people working and renting and struggling themselves pay for you to save for a house?

We’re all responsible for our own choices. You are choosing to spend years training for a low paid profession. That means you will likely need to put homeowning on hold til you progress to a higher wage.

OP, if you want to save for a mortgage then you get a job and save money from your income. You can't expect taxpayers to pay enough for you to buy a house. If that was the case, there would be no incentive for people to work.

Overall the British welfare system is completely fucked. And there's no desire to fix it.

There's a petty streak of wanting everything to be really really hard if you have the audacity to need any help. In this regard Britain is a self-defeating nation. Social security in other nations is much more sane.

It'll not get changed. But it does shock people who get hit by redundancy having paid in for 25 years just how little they get back.

And you always get some tosser saying 'what if you've a million pounds' like it's a killer argument.

Yabu to expect to be able to save for a mortgage using public money

If you are on a low wage, then your choices are find a better paid job so you can afford to save for a property, something millions of us have done before you ( and with no help from parents, inheritance etc) or stay as you are

You say you are training for a profession with a low wage, not sure if that’s whilst training, I’m which case once trained your income may go up and you can save for a property then, or if it’s always low paid it’s your choice to do it so why should everyone else t your desire to own a house

Cut off for savings is because it’s benefits, not to allow people to save public money

@User78890 Oh well then I don't know. My experience with it is that it is annoying and unfair in general.