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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Savings limits - time for it to be upped?

236 replies

Goose38 · 14/11/2024 17:42

Just wondering if anyone knows if there’s any plans for the savings limit to be upped .
I think it’s crazy it’s been capped at 16k for so many years, this needs updating.
How is anyone meant to improve their lives with such a low limit . If anyone knows of any government petitions etc would be grateful.

OP posts:
DragonFly98 · 16/11/2024 12:29

TigerRag · 16/11/2024 11:18

It shouldn't be one rule for people on one working age benefit and another if you're on a different working age benefit.

Tax credits are (or were) benefits. I never understood why the rules were different.

They were different because the circumstances were different if you work full time but the average rent is unaffordable there is very little of anything you can do about that. It’s not comparable.

L00nnggHaulSleep · 16/11/2024 12:34

FWIW
Yes. there should be a cap on savings for those on benefits.

Because some people work & never claim benefits, so they pay into the "pot" for people on benefits.

For those who would like a higher amount

20K ?

30K ?

The average wage
35K ?

There has to be a cut off at some point ?

JLou08 · 16/11/2024 12:41

I think it should be upped and may do the economy well if it is. People on benefits (most of which are topping up low incomes for hard working people or for disabled people) will never be able to save for a deposit on a home. That means when they reach retirement age they will be dependent on housing benefit and the council will be paying all their care charges. If they own a home at retirement no need for housing benefit and if they need to go into a care home their home contributes to the care costs.

westisbest1982 · 16/11/2024 12:55

I would love for there to be a scheme in which people can save only for a property deposit - similarly to a LISA but even more restrictive. I would also love world peace. Both things are never going to happen. And no, the cap shouldn’t be upped. It’s overly generous as it is. £10K sounds about right.

Overthebow · 16/11/2024 13:36

DevilWitch · 16/11/2024 11:27

I think it should. If you’re working full time and earning as much as you can and it’s still not enough to live comfortably a tax credit top was more to counteract piss poor wages.
I view that very differently to choosing not to work or being temporarily unemployed and claiming unemployment benefits.
Now both cases fall under UC.

it is different and I completely support those on low wages working full time getting UC top up. But I fail to see how if someone is on too low a wage to be able to afford rent by themselves would be able to save up more than £16k. If they are able to save that amount then their wage is enough and shouldn’t be topped up by benefits.

DrCoconut · 16/11/2024 14:19

DevilWitch · 16/11/2024 11:16

I think it should be separated out again as it was before with tax credits. This allowed families in full time employment to have enough to live on plus be able to save towards getting a mortgage etc.

Since the introduction of UC, those people are lumped in with the work refusers and everyone is seen as a benefit claimant

Absolutely. When DS1 was small the system was much kinder and fairer. You got a chance to build a future if you were willing to work. If not then you were stuck on unemployment benefits. The vast majority of people I knew gradually upped their hours as their children grew up and (especially if they had a partner) came off tax credits. A lot had done additional training, bought a basic house etc so their long term finances were much more secure. Now everyone is lumped in together as a scrounger who should be grateful that the workhouse is a thing of the past. It's so divisive and short sighted and it now feels like it's designed to punish and humiliate people for being less well off. I'm not saying the government should buy everyone a house (though people don't seem to object when the recipient is a rich landlord) but a savings scheme for a house deposit is a sensible thing. Building an emergency fund to cope with an unexpected bill is similarly a good thing and for this the current limit is probably about right. Things like school trips cost money and are hugely enriching, especially for pupils whose families cannot normally afford those experiences. Anyone who says tough, poor kids should stay at home is overlooking the value of cultural capital and raising aspiration. Again, I'm not saying a two week ski trip but everyone should get to experience things like museums and theatre. It all adds up. People who are saving on UC will be living frugally to do so and deserve to have some reward for their efforts.

TigerRag · 16/11/2024 16:11

How is it right that as a disabled person I'm not allowed to save (because being disabled is expensive) but it's ok for those who work the minimum to receive benefits if they have thousands in savings, a second property, etc?

Theunamedcat · 16/11/2024 19:03

TigerRag · 16/11/2024 16:11

How is it right that as a disabled person I'm not allowed to save (because being disabled is expensive) but it's ok for those who work the minimum to receive benefits if they have thousands in savings, a second property, etc?

No-one who has a second property gets benefits it's classed as savings

Theunamedcat · 16/11/2024 19:08

GabriellaMontez · 15/11/2024 16:09

This.

And if they don't ever improve they continue to be a drain on the system think about it

You rent they pay you over a thousand pounds in rent in some areas a month if you can buy your own home you get a slightly bigger work allowance nowhere near the rent payments

XenoBitch · 16/11/2024 21:21

SnoopysHoose · 16/11/2024 10:41

If you have the ability to save £16k plus then , no you shouldn't receive benefits. To actually state how can one save for a house etc, do you think other ppl should cover your benefits so you can save for a house?
I'm stunned ppl think like this, benefits are there for times of need to support low earners etc not enable huge amounts of savings.

It is not about the ability to save £16k. I is about what you have in savings. People who apply for benefits and have £16k will get nothing. People on benefits who come into money wont have saved that much... they will have inherited it, been gifted it, or won it. Or they sold some high value items.

People on benefits who can save should be encouraged to do so. Being able to save does not mean they are being paid too much. Some people will live very frugally so they can save.
There is even a Gov backed scheme called Help to Save where low earners on UC can get a 50p bonus for every £1 they save over 4 years.

Gogogo12345 · 16/11/2024 21:32

L00nnggHaulSleep · 16/11/2024 11:55

Ref Government protected accout"

Each person can save up to a maximum of 20k each, per year into a tax free ISA

Each person under a certain age, can save into a LISA, tax free

Each person can save a maximum of 50K into Premium Bonds & all winnings are tax free

If you do not work, a person can save a maximum of £2880 per year into a SIPP pension & the tax will be added on top by the Government for free

Therefore, these savings already exist

Other savings are liable for tax !

But I think they would count towards the 16k UC limit surely.

XenoBitch · 16/11/2024 21:56

Gogogo12345 · 16/11/2024 21:32

But I think they would count towards the 16k UC limit surely.

Yes, they all count.

Overthebow · 16/11/2024 22:07

TigerRag · 16/11/2024 16:11

How is it right that as a disabled person I'm not allowed to save (because being disabled is expensive) but it's ok for those who work the minimum to receive benefits if they have thousands in savings, a second property, etc?

Surely you are allowed to save as much as anyone else? Being able to is another matter however.

IVFmumoftwo · 17/11/2024 06:42

Most of the ones with savings will be tax credits claimants moving over. The ability to save on UC is significantly different to tax credits.

TigerRag · 17/11/2024 07:38

Overthebow · 16/11/2024 22:07

Surely you are allowed to save as much as anyone else? Being able to is another matter however.

I'm not allowed to save as much as those as tax credits though. Why is it one rule for them and another for everyone else just because the name of the benefits is different?

IVFmumoftwo · 17/11/2024 07:42

TigerRag · 17/11/2024 07:38

I'm not allowed to save as much as those as tax credits though. Why is it one rule for them and another for everyone else just because the name of the benefits is different?

Most of the moaning about savings is done by tax credits claimants who don't realise how lucky they were!

westisbest1982 · 17/11/2024 07:46

TigerRag · 17/11/2024 07:38

I'm not allowed to save as much as those as tax credits though. Why is it one rule for them and another for everyone else just because the name of the benefits is different?

Tax credits don’t even exist anymore!

IVFmumoftwo · 17/11/2024 07:48

westisbest1982 · 17/11/2024 07:46

Tax credits don’t even exist anymore!

Many people are still on them.

CeeJay81 · 17/11/2024 07:56

IVFmumoftwo · 17/11/2024 07:48

Many people are still on them.

They are stopping tc fully by next March. I think the taper rate of 6k is low, esp if you have to wait ages for your first payment and need a car for work. It's not just unemployed people who are on UC, many claim towards housing, as minimum wage just isn't sufficient. 16k I think is fine though.

Soukmyfalafel · 17/11/2024 08:12

I don't have an opinion on the limit, but I have a severely disabled child and could claim the severely disabled element if I was to care for him full time. If I did this I would completely throw away saving a deposit to buy my own place and then might need housing benefit/social housing all my life. Imagine saving up a decent amount of a deposit, then frittering it away through being unemployed/made redundant or having to be a carer or ill with cancer for a couple of years. You'd just end up being needing housing benefit until you die, as there was no way you'd get that deposit back.

Then you have people who already own/have wealth in property getting the same. I don't agree with that. It's the same with WFA if you have savings you don't get it, but if you own an expensive 3+ bed property but are cash poor you get it. It treats people with wealth the same as people without it, but I don't think people should sell their homes, just people who rent should have a higher threshold.

I don't think this issue is a clear cut yes or no as people might think, and it's a bit more complicated than what they can get their head around. People are also forgetting that lots of people claiming UC are working couples and not all on national MW either. There is a childcare element to it that people use too. I don't think the threshold should be massively high, but it is at a point where people have to remain reliant on the system for housing and get stuck on UC too.

Ultimately, it is the problems in the country that have led to more benefits payments. work needs to actually pay more, housing needs to be built so we aren't paying tax payers money to private landlords, people need to have a less busy lifestyle so they can be healthier, and childcare needs to be cheaper. Failures in these areas is why we are in this situation in the first place. Changing a savings limit isn't going to change these problems.

OctaveoOctober · 17/11/2024 08:14

Yes definitely up it at least 25 grand! Maybe 30.
My dm in 70s got divorced and wasn't able to get any help she for some reason had to rent which ate away at her meager divorce money she was trapped age 70 so couldn't do anything.
She then ended up on benefits anyway and lost that little capital she had.

Overthebow · 17/11/2024 08:15

TigerRag · 17/11/2024 07:38

I'm not allowed to save as much as those as tax credits though. Why is it one rule for them and another for everyone else just because the name of the benefits is different?

Tax credits are being phased out so everyone will be off them soon. Those with too high savings won’t be eligible for UC.

Gwenhwyfar · 17/11/2024 08:16

BibbityBobbityToo · 14/11/2024 17:44

What would you change it to if you were Prime Minister and what services would you cut to fund it?

I wouldn't have a savings limit at all for contributions-based benefits. It's a social insurance system. If you pay in, you should be able to take out. It's also unfair because people with assets of that value, eg cars and jewellery can still claim.

Gwenhwyfar · 17/11/2024 08:20

Positivenancy · 14/11/2024 22:11

That’s exactly how it works in Ireland. If you lose your job you are entitled to jobseekers benefits for a period of time regardless.

https://www.citizensinformation.ie/en/social-welfare/unemployed-people/jobseekers-benefit/

there are a few terms and conditions but it’s essentially dependent on PRSI payments.

In many European countries the right to job seekers allowance is universal.
The government shouldn't be telling people to save and at the same time punishing them for it.

Gwenhwyfar · 17/11/2024 08:22

Overthebow · 15/11/2024 06:06

People aren’t poor if they have £16k in the bank.

They will be quite soon with no money coming in.
Also, they are no richer than people who own cars or other assets.