Universal Credit - how can this be right?

[beentheretoo]

I’ll admit I know very little about Universal Credit apart from what you hear on the news thankfully (touch wood) never had to claim).

A friend recently got a new job 2 days a week I congratulated her and said it’s the type of job they are always looking for people I bet they’ll be offering you more days in no time. She then said oh I don’t want more days it’ll affect my UC, I’m allowed to work up to 16 hours before they take money off me and besides I’m really looking forward to having 3 days to myself once the kids are back in school. She’s a single parent her DH left her when she was a SAHM she was on full UC for a bit then had another PT job now this new one (she has a degree but doesn’t want to go back into that field).

I was thinking about it how can they be right that if you work 16 hours you get full UC but if you work 20 you get money taken away? Where’s the incentive to work more hours? My friends DC are older so doesn’t need childcare and I’m sure loads of people would love 3 days to themselves I bloody would.

Am I getting it correct then?

Yes, yes and yes. Yes to everything.

It's a great way of saving anyway, because for everything you put in, the government gives you another 20%. And if it's a workplace scheme your employer has to put in at least 4% of your gross wage, although lots put in more. So you can have masses going in every month and still keep your tax credits. Have a go on entitled to if you want to see it in action. Seriously, put in your gross yearly wage and then tell them you're putting 24% of it into a pension and see what you get in top ups.

www.gov.uk/tax-credits-calculator

I prefer this one to entitled to. But play - it's pretty amazing when you see it in action.

Thank you, I will be looking into that.
Im on furlough at the moment on less than 80% but going back to work next month.
Im on universal credit not tax credits.

You're welcome. It's perfectly legit and the government wants you to do this btw because they hope it will save them money in the long run.

@DogsAreShit so at the moment I pay £22 monthly into my pension. So if I increase my pension contributions voluntarily then you're saying I will still take home the same wage as I will just get more in tax credits? Tax credits to top up the wages I'm short on?

Brilliant thank you.
Im 35 and starting to get worried about the fact that I'm most likely to be poor all my life.
Trying to be sensible and clever with the money I do have.
For anyone else working and receiving universal ceedit, open a help to save account, the government give a 50% bonus on anything you save, it's really worth saving the £50 a month or as much as you can afford.

Yes the help to save account is brilliant! I opened mine in 2018 and have saved the max every month.

Yes I have a help to save too. 50% bonus!! It almost seems too good to be true.

@JosieJarker

Brilliant thank you. Im 35 and starting to get worried about the fact that I'm most likely to be poor all my life. Trying to be sensible and clever with the money I do have. For anyone else working and receiving universal ceedit, open a help to save account, the government give a 50% bonus on anything you save, it's really worth saving the £50 a month or as much as you can afford.

I have not heard of Help to Save. Do you have to be working? I am on UC but in the LCWRA group.

Yes help to save is excellent too.

@MondeoFan it depends on what you've got coming in and how that works with your own allowance ie how much you can earn before they start deducting from you. So no it's not an exact pound for pound substitution. It just means that they won't count what you pay into your pension as income. It's different for everyone which is why I said put what you can in.

So for eg five years ago I wasn't putting as much in because I was earning less and even with them not counting it as income I would still have lost too much of the top up to be able to make it work. But then somebody with more children than me on that wage could have afforded to put in more, because they would be allowed to earn more before losing tax credits, and someone with fewer children wouldn't be putting in as much etc etc.

Have a go on the calculator and try out different scenarios until you find the one that fits what you need to live off and take it from there. I'd be very surprised if you ended up only being able to pay in £22 a month though.

As with everything tax credits, there comes a point where it makes sense to earn less and pension contributions are a way of having less income : you just need to find that point.

I save the full amount too, nowhere else will give a 50% return.
What are you planning to do with the money?
Id like to save mine somewhere it can grow, possibly stocks and shares isa, or premium bonds, I've got a couple of friends who are evangelical about cryptocurrencies but thats risky.

@XenoBitch you do have to be working for the Help to Save.

[quote Waxonwaxoff0]@XenoBitch you do have to be working for the Help to Save.[/quote]
Ah ok, thanks anyway.

@DogsAreShit sure I understand.
I worked out I was better off doing 24 hours than I was doing 24 hours as help towards childcare costs etc.
I know what you mean you need to find that point.
I get housing benefit too so quite often when my tax credits go up my housing benefits go down and so on.....it always works itself out in the end.

I will try the calculator thanks for your advice

I already do the help to save and just had my first bonus last month.

@JosieJarker

I save the full amount too, nowhere else will give a 50% return. What are you planning to do with the money? Id like to save mine somewhere it can grow, possibly stocks and shares isa, or premium bonds, I've got a couple of friends who are evangelical about cryptocurrencies but thats risky.

It will probably be no suprise to people who've read the posts on this thread that I have a lot of crypto 😂

£'s are trash especially since the printy printy

@DogsAreShit meant 16 hours 🤦‍♀️

I think I'm going to put mine into a stocks and shares ISA. I didn't used to know anything about them but I've got teens who have the child trust funds so basically stocks and shares savings accounts, and although they've been up and down over the years long term they're worth way more than just interest rates would have given them.

But sadly in my opinion, it's might not be the best idea to accumulate assets whilst on UC, thanks to the savings taper that's been discussed elsewhere in the thread. Pensions are sacrosanct though....and dyor because there's a few equities here and there that are starting to act as proxies for bitcoin, given the Institutional interest. Thanks to the FCA banning it, you can no longer buy (you can hold.them if you have them) the bitcoin/Ethereum etns in your pension, which is scandalous imho.

I am tempted by crypto currencies but worried I've missed the boat with them because they're so high now.

@DogsAreShit

I am tempted by crypto currencies but worried I've missed the boat with them because they're so high now.

Not financial advice, but diversification in general doesn't see to be a bad thing. And if a person chooses to pound cost average (drip feed a little every month or so) into a basket of different things....stocks, gold, commission, crypto...it's historically not been a bad plan. Of course, past performance etc.

Indeed everything I've written on this thread should be taken as not financial advice - after a I could be a delusional idiot pretending to earn 150k a year with not a penny to my name.

Yes the 6k savings cap is a bugger, not enough for a deposit which means I'll be stuck renting forever unless I meet someone who wants to buy with me.
If you buy crypto does that count as savings?
I could buy 1k and hold it until its worth a lot.
Unless it's not going up much more.

I save towards my company's sharesave scheme also so I'm hoping I can make a bit on that.

@MondeoFan yes exactly and I agree it gets more complicated when you add housing benefit into the mix. Pension contributions are a really good way of avoiding losing out though. So you can get pay rises and work more hours and so on but as long as you keep around the level of income after pensions that works for you, you won't see a change in your tax credits, although your housing benefit will go down.

@JosieJarker

Yes the 6k savings cap is a bugger, not enough for a deposit which means I'll be stuck renting forever unless I meet someone who wants to buy with me. If you buy crypto does that count as savings? I could buy 1k and hold it until its worth a lot. Unless it's not going up much more.

Yes, crypto counts as savings as far as I know, but could be wrong. It's probably very difficult to trace, depending on how you acquire it - but that is not the point. Stay legal.

As far as it going up further, who knows? All I do know is 'Money printer still going brrrrr' in western economies.