Can I do this and claim benefits or not?

[Yapppp]

I am a massive worrier. I love my job and don’t want to not work but I overthink everything and like to have a plan in an emergency.

I have a decent amount of savings, enough to pay off half my mortgage. I’m keeping it investments for now as well as overpaying my mortgage monthly. If I were to lose my job, could I pay off the chunk of my mortgage with my savings and then claim benefits while I looked for another job? It almost seems pointless saving if I don’t get the same access to benefits as the next person should my job go wrong and I need time to find another. But I also don’t want to pay it off now when I’m working. Does anyone know as it seems confusing online when I google it!

Yes you could claim a standard amount. Deprivation is gifting money or buying frivolous items (mortgage isn’t one of them!).

"it almost seems pointless saving", that's quite a leap! Maybe consider others who aren't lucky enough to have the ability to save money.

In my experience insurance would only pay out once all other options are exhausted - like your right to contributions based JSA for first 6 months

I think you should look at how little benefits you would actually get if you did try and claim them.
As a homeowner you can not claim housing benefit.
You are better looking at income insurance and how many months your savings will stretch, plus applying for mortgage payment holidays.
I think you don't know how little the benefits actually are that you would get.

It seems strange to keep savings for a rainy day and when the rainy day comes remove your access to them.

I think an earlier poster had a point about whether you want to manage on that level of money. Around £400 each month for an adult I think.

Definitely not it is deliberate deprivation of capital in order to claim benefits. You've got savings - that's what they are for.

Honestly this kind of selfishness is why our country is in such a mess. If you want to pay off half your mortgage you can...

And then if you have no savings under £16000 you can claim benefits. That's pretty generous.

I'm guessing you don't want to now because it's on an old fixed rate so you are making more in investments. So greedy.

This is correct, job seekers allowance isn’t means tested, and can be claimed by anyone regardless of what’s in your bank account.

If you are made redundant you should claim my so that your national insurance contributions are covered as well as the period of time from a background checking perspective!

You need to commit to 30+ hours a week job hunting, and meet every 2 weeks.

@NeatRoseOtter your post doesnt make sense. How is it greedy to make the most of investments? It’s not affecting you is it? You’ve just said yourself I could pay off the mortgage now so I’m hardly doing anything wrong by not doing and trying to make more in the meantime…?

If you pay off a lump sum after you've started a claim, you may get into trouble. This happened to me a few years ago, through complete ignorance. I used part of my redundancy payment to put a lump sum into my mortgage, and because you need to provide bank statements, I was brought in and questioned. I had to repay Council Tax benefit I'd received, and wasn't able to claim more than basic JSA. I was mortified, because I thought it was a sensible thing to do, and came from a position of ignorance - which is no excuse, I know. So, just be aware of that.

There has always been a contribution based JS allowance. Still is as longasyou have worked for the previous 2years and paid NI you can claim it. Just like your pensions contributions, it's worth claiming to as keeps your NI contributions complete for your pensions.

https://www.entitledto.co.uk/help/contribution-based-benefitswww.entitledto.co.uk/help/contribution-based-benefits

Why is she selfish? She’s in a job and if she lost it she’d look for another. She’s the sort of person we should be helping. Someone with a work ethic. So many choose not to work in this country.

You can claim new style job seekers without a means test but is small amount. UC is means tested and not eligible with over 16k in savings, most people don’t realise that the state benefits don’t actually pay mortgage interest anymore in fact it’s a loan along with a charge on the property that you live in and you would need to have received UC for 3 months before being eligible. Not sure why people are jumping to conclusions if OP is a high earner the monthly mortgage could be a lot higher than the amount she might be eligible to on benefits. So common sense would say to use savings towards bringing the debt down if she lost her job.

But that's what she would be doing. Only paying of the mortgage on one lump sum.

P

I literally said it was permitted. I raised the moral aspect of it, not the legislative. What I said was, in the case of mortgages its been questioned for some time because of the absolute knowledge of the claimant that by using a large chunk of money they could otherwise live on they use it to clear a debt that then gives them a realisable asset with sizeable equity- then claim means tested benefits, with the asset still there for later.

"H1796 People are not treated as having capital of which they have deprived themselves if

1. it reduces or pays a debt owed by the person"

https://assets.publishing.service.gov.uk/media/65d336b3e1bdec2be1322238/admh1.pdf

OP this thread is not the place to get reasonable advice unfortunately...

Most people seem to have no idea of what they are talking about.

As you can't get housing benefit if have a mortgage it would make perfect sense to reduce your mortgage by using your savings to reduce how much you have to pay each month on housing.

And as I have already posted you are perfectly entitled to claim benefits as long as you don't have more than the saving limit (16K).

Just ignore the bleating about ''deprivation of capital' as it does not apply.

The measly unemployment benefit you would receive would not help you pay your mortgage...

The people going on about whether this is ''moral'' would not be there to help you pay your bills if you lost your job so frankly they can jog on.

I'm not denying the legislation. My work is based on it.

There is a contribution based system

@Yapppp it impacts me as a taxpayer who would be paying these benefits yes.

Because she is trying to maximise her profits at our expense.

I.e. saying "seems pointless saving if I don’t get the same access to benefits as the next person".

1. I doubt your mortgage provider would let you over pay that much at once 2)if you're deliberately spending to go under the capital limit to claim benefits they would most likely see that as deprivation of capital

The rules are you may pay off debt that becomes due. The mortgage debt will not crystallize until the end of the mortgage term. So what this means is if you are at the end of your 25/20/15 year term and still have mortgage outstanding for whatever reason, this is not deprivation of capital.
If you are not at the end of the term, then paying off a chunk of the capital owing will be likely to result in a finding of deprivation of capital. It very much depends on the reason for doing so. This applies to those below state pensionable age. The rules are looser for them and slightly different.

Is this a fishing expedition for a 'brilliant' idea to seize the houses of anybody who becomes eligible for universal or pension guarantee credit?

The latter would bring in a fair few bob, granted, assuming that the care home fees had been recouped first (which as per the Care Act passed in 2014, has been quite advantageous for private equity firms). But they'd probably need to concentrate on the families/women receiving benefits to sneak it through the usual 'Labour want these people to receive your tax money and hold onto their assets without paying it back, we'll make sure they pay their way if you vote for us' spiel before extending it to benefits paid to pensioners - where the real money can be made.

You can totally claim job seekers for 6 months as its not means tested and pay down your mortgage though it is recommended you have 6 months expenses saved as a cushion too

Having checked this @Lougle is correct and I was wrong. Under the new Universal Credit system the OP would be able to reduce her savings to under £6000/£16000 by paying down her mortgage and claim Universal Credit.

So Universal Credit quietly favours people with mortgages and homeowners over renters.

If you rent, are trying to save say for a mortgage or whatever and you have over £16000 even in a LISA you can't get UC, but if you have a mortgage you can just pay it down and qualify.

In the UK system, unlike others there is no absolute capital limit for owning a home and claiming benefits.

I wonder if this also one reason why many more over 50s are leaving the job market permanently.

Get made redundant, pay off remainder mortgage with lump sum and claim benefits. They wouldn't have been able to do that before. If you claim PIP even get a nice new Motability car...

As others have posted, uou would be paying off a debt to keep a roof over your head. This will save the state providing you with housing benefit.