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)...

@Stripesgalore most people do own their own home, statistically.

[quote Eatyourbanana]@MarleyTheDog - yeah you’ve lost me, I don’t have 16k in savings so why would i laugh at people you lemon?

^So you think it’s justified that someone with £16,000 in savings is complaining they cannot claim UC??

Why do you think they should?^

Because other wise you are denying these people the right to ever own their own home. Remember we are talking about working people here, not ‘benefit scroungers’ which seems to pop into peoples heads as soon as you hear the words ‘universal credit.’

I agree there should be an account where the savings can only be used for a house deposit & it doesn’t effect your UC. It’s the only way.[/quote]
I don't have another year's salary in my bank account. Because I have to pay my bills. I don't receive benefits.

Can I have some money towards a house of my own, please?

@ MitziK if you only earn 16k a year you either have a high earning partner, no children or little to no housing costs. Or you would be claiming UC too.

That doesn’t mean the young people now who want to be able to buy are going to be able to.

@Eatyourbanana

@ MitziK if you only earn 16k a year you either have a high earning partner, no children or little to no housing costs. Or you would be claiming UC too.

That's right. Adult children.

I'd still quite like somebody else to give me a year's salary to stick in the bank to put me in the position to buy somewhere in a few years, though. It wasn't as if I could ever qualify for a mortgage when they were at home, as I was busy paying rent, childcare costs and for everything else at the time.

It's only fair, apparently.

But realistically from a lenders perspective if you're basing your deposit/mortgage payments to include benefit payments then that's classed as a bad loan already? The system has changed/is changing for landlords to not discriminate if someone is in receipt of benefits (rightly so), but I can't see many mortgage lenders extending loans based upon something that might not even be in place in 12mths time? Yes, the property market is a nightmare to get on to these days. But the banks made the past mistake with extending loans to those who couldn't afford to repay, and it caused a massive shitstorm across the board for both buyers/lenders. If you're reliant on gov funding there's nothing to say it'll be there in the future. Same goes for those funding via employment tbf but it's classed as a lower risk as they've generated the money themselves. Yes, it sucks that's some folk inheret £Xxxx, but that's just luck, and there's many others where there's no inheritance to ever be had.

@Catsup

But realistically from a lenders perspective if you're basing your deposit/mortgage payments to include benefit payments then that's classed as a bad loan already? The system has changed/is changing for landlords to not discriminate if someone is in receipt of benefits (rightly so), but I can't see many mortgage lenders extending loans based upon something that might not even be in place in 12mths time? Yes, the property market is a nightmare to get on to these days. But the banks made the past mistake with extending loans to those who couldn't afford to repay, and it caused a massive shitstorm across the board for both buyers/lenders. If you're reliant on gov funding there's nothing to say it'll be there in the future. Same goes for those funding via employment tbf but it's classed as a lower risk as they've generated the money themselves. Yes, it sucks that's some folk inheret £Xxxx, but that's just luck, and there's many others where there's no inheritance to ever be had.

Some lenders will take benefit payments into consideration but like you say I don't entirely understand why because the criteria can change. On UC there is currently a covid increase of about £90 extra a month which will most likely disappear next April. With mass unemployment looming it is a worry how the benefits bill will spiral and not impossible that cuts could happen.

Can I have some money towards a house of my own, please

I managed to pay my mortgage whilst working long hours and bring up 5 kids - when my ex decided to run off with his latest shag.

My home is now mortgage free - because I worked and struggled to pay for it and feed 5 children, over 30 years.

If we are all entitled to money for nothing I’d love £16,000 in the bank please. It’s only fair - according to the new age, lazy, entitled offspring of lazy, entitled parents!

The benefits system has to fail soon due to the significant rise in numbers thinking the world owes them a living whilst they either sit on their arse doing nothing or work part time, build up substantial savings and expect the tax payer to buy them a house!

@SoloMummy haven't had time to read all the replies but yes to this. If anyone is unable to secure a high wage you are trapped claiming the housing element which is extortionate with the current rentals. You cannot claim this if you have a mortgage. Neither the government or the claiments are gaining anything it seems

If the OP withdrew the money and spent it all on a night out then it wouldn’t matter so it’s no different to give it to a family member as a gift.

Both those scenarios would quite likely be classed as deprivation of capital - www.entitledto.co.uk/help/Deprivation-of-savings-and-other-capital-Universal-Credit

@pumpertrumper I would be working full time so I would not be living on tax payers money, but thank you for the kind assumption.

Those who work FULL TIME (who btw are paying tax) should be allowed to save as much as those fortunate to be on a high wage.

If you are receiving in benefits more than you are paying in taxes then yes, you are living partly on tax payers' money.

@Eatyourbanana sorry to hear that. As a PP has said, there should be a regulated way to ensure savings like this are spend on a mortgage which will eventually benefit the government. It really isn't well thought out!

@middlesexgirl I don't think it's right to assume someone is a benefit scrounger for claiming a tiny bit of top up though. A lot of people are entitled to child benefit, it doesn't mean they are benefit scroungers

@jeschara I don't think you understand my post. I don't want tax payers to fund a mortgage. For one, I don't have 16k or near it. And 2, I will be a full time working tax payer. My mortgage will come out of MY wage. Even if I was to be able to save for a mortgage, it wouldn't be for a long time. But my point is, even if you rely on £100 universal credit to cover childcare fees, you will never be able to get a mortgage if you were to save after a good 30 years.

Please tell me how £100 a month would ever fund a mortgage??

It was all very well when we had the safety net of enough social housing or housing benefit to pay private rent. Now that being made redundant or getting sick carries a high risk of homelessness, I agree things should change. People end up spending all their housing fund savings, need to claim benefits, but the benefits often aren't enough to pay for essentials (i.e. food, housing).

There should be a higher savings threshold for claimants not in secure housing (rented or owned) - perhaps with the condition that the savings go to a dedicated housing fund account. Either that or we need more social housing and/or in return to full housing benefit.

Bear in mind it's in everyone's interest as the cost of temporary accommodation (paid for with our tax) is very high.

I do think it's silly that a sensible person putting money away is penalised over someone spending it all. Remember UC is for working people in full time jobs who happen to not be getting the living wage for all their long hours as well as people who aren't working at all. Why should those working hard be looked down on as if they are scroungers? During the pandemic I was counted as an essential key worker but my wage is still below the living wage and my family survives on tax credit top ups. Apparently I - and many like me - aren't essential enough to deserve some savings to help their lives run smoothly in harder times.

You should be able to save if you want to and are able to. If i choose to only eat beans on toast for a month and put the rest I'd spend on other food away I should be able to do this and not have the assumption I am profiteering.

Also the rent element of UC is probably one of the largest parts of the payment, especially with private rents over £1k in many areas. It would make sense for more people to be able to buy if they choose rather than putting it into the pockets of private landlords.

But you're basing this money to save for a deposit on hypothetical savings? I was a lone parent who undertook a degree. It doesn't work out as X amount funding plus X amount benefits plus X amount housing costs. It all gets taken into consideration. So even if you opt for a bursary funded course the DWP won't dismiss it.

@MiddlesexGirl

If you are receiving in benefits more than you are paying in taxes then yes, you are living partly on tax payers' money.

That probably includes a lot of the population then.

@Smallsteps88

It’s deliberately designed (by people who knew they would never have to live on it) to be uncomfortable to live on UC because those that designed it think poor people just need the right incentive to stop being poor. That if its unpleasant you’ll get off your lazy arse and make your own money. Rather than the reality that a great many on it simply can’t earn more than they are and will always be reliant on state top ups for all sorts of valid reasons.

Yes this.

Britain's approach to benefits is a mess. So is out approach to education and other support for citizens.

It all contributes to why our overall national wealth, and our standards of living are falling. It's nationally counter productive.

But I can not see it changing.

This country is on its knees, although not perfect the benefits system is aimed at helping as many people as possible, not as individuals with aspirations. If you want to save for a mortgage make a different career choice.

Other people are not there to subsidise your savings and your lifestyle choices, including having a child early in life. Start working out what you can do to better things, not those around you.

Some people on this thread are actually pretty ignorant. Many people can't just "get a better job" as they're not capable of that. All these low paid jobs - carers, supermarket staff, cleaning jobs - somebody has to do them.

If rent wasn't so ridiculously high and wages weren't so ridiculously low then low paid workers wouldn't need UC to top them up.

It's a safety net for those with nothing. If I want to retrain it's perfectly reasonable for me to save up and use my savings to support myself, why should the taxpayer pay? Too many people feel entitled, benefits should be about helping the vulnerable and only for a short time to get them back on their feet (pensions and severe disabilities aside)