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AIBU?

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Original poster

Can I do this and claim benefits or not?

118 replies

Yapppp · 31/10/2025 20:14

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!

OP posts:
NeatRoseOtter · 31/10/2025 22:33

LadyLolaRuben · 31/10/2025 22:25

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.

No. It costs the state more than the old system.

Previously anyone mortgaged who received a lump sum had to keep to their normal spending including paying mortgage until they returned to work or capital dropped under £16000. This happened a lot.

In practice many younger people wouldn't have gone on means tested benefits as they would have run down savings, job hunted and got a new job with i.e. a redundancy payout.

There are also various indirect effects. I suppose it shouldn't surprise me the Torys secretly made benefits better for homeowners...but disappointing to find out Friday evening. TTfN.

Rosieposy89 · 31/10/2025 22:37

Under UC yes you can. You are allowed to pay off debts you owe, including a mortgage. You will need evidence. I think it's a fair rule as you can't claim housing element for a mortgage l.

MidnightMusing5 · 31/10/2025 22:38

i don’t think it’s deprivation of sssets IF it goes towards paying debt. (I would ring citizens advice and confirm, but I’m fairly certain)

flipflopflops · 31/10/2025 22:45

Yes you can.
From the government website:

Reducing your money, savings and investments on purpose
You have not knowingly reduced your money, savings and investments if it has been used to:

  • pay off or reduce a debt
  • pay for goods and services that were reasonable in your circumstances.

https://www.gov.uk/guidance/universal-credit-money-savings-and-investments

Universal Credit: money, savings and investments

How Universal Credit is affected by having money, savings and investments. We call this ‘capital’.

https://www.gov.uk/guidance/universal-credit-money-savings-and-investments

Unexpectedlysinglemum · 31/10/2025 22:51

Jellybunny56 · 31/10/2025 20:16

No, you can’t randomly decide to pay off a huge chunk of your mortgage coincidentally the day you lose your job and then claim benefits. That’s a nice easy open & closed deprivation of assets case for you, not a chance.

Incorrect. You’re allowed to pay off debts with your savings, a mortgage is a debt. I only found this out after I did 6 months living off my savings while on mat leave - wish I’d put my savings into my mortgage and claimed uc instead!

Unexpectedlysinglemum · 31/10/2025 22:51

Moveoverdarlin · 31/10/2025 20:19

You won’t have access to the same benefits as other people because you simply don’t NEED them. You can’t claim benefits whilst sat in a home you own outright.

Yes you can. Just not the housing benefit portion.

NeatRoseOtter · 31/10/2025 23:16

For those who naively think housing benefit/UC actually covers rent...no it doesn't. It's set at the bottom third of the market and there's an overall benefit cap.

For me renting a cheap property in my area once I ran down my savings to under £16k (saved for a deposit), and after paying rent I would only have a couple of hundred for bills and all food - or not enough to meet essentials.

It's one of the reasons so many need food banks.

BringBackCatsEyes · 31/10/2025 23:20

Moveoverdarlin · 31/10/2025 20:19

You won’t have access to the same benefits as other people because you simply don’t NEED them. You can’t claim benefits whilst sat in a home you own outright.

Yes you can.

Ihad2Strokes · 31/10/2025 23:21

Rexinasaurus · 31/10/2025 21:24

This thread makes as much sense as the gvts economics policies.

Show quote history

Maybe several cups first then!!

JaceLancs · 31/10/2025 23:23

There is a very strong possibility I will be made redundant in the next 6 months and the redundancy payment would clear my mortgage
Leaving me with savings of less than £5k
I’m hoping to get another job fairly soon after this happens but would not need to earn as much if I was mortgage free
If I’m jobless for a few months was hoping to get JSA in the interim
Is this viable? I’m 61 and have worked since I was 16

BringBackCatsEyes · 31/10/2025 23:23

NeatRoseOtter · 31/10/2025 22:20

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...

Edited

UC isn’t going to cover running a home.
You also need to demonstrate you’re looking for work.

BringBackCatsEyes · 31/10/2025 23:24

JaceLancs · 31/10/2025 23:23

There is a very strong possibility I will be made redundant in the next 6 months and the redundancy payment would clear my mortgage
Leaving me with savings of less than £5k
I’m hoping to get another job fairly soon after this happens but would not need to earn as much if I was mortgage free
If I’m jobless for a few months was hoping to get JSA in the interim
Is this viable? I’m 61 and have worked since I was 16

Yes you can claim JSA. It’s not a lot though.

childofthe607080s · 31/10/2025 23:25

BringBackCatsEyes · 31/10/2025 23:20

Yes you can.

Show quote history

Because it’s cheaper probably that having to pay the housing aspect

BananaOrangeTang0 · 31/10/2025 23:34

If a person is made redundant they can claim "contributions based job seekers allowance" for a certain time period without means testing.

You may also be eligible for council tax discount, but would need to apply separately

DWP does not pay mortgages

DWP can pay mortgage interest only in some circumstances (loan)

Once a certain time occurs, means testing happens

I believe that you can take out insurance to help pay a mortgage

Life insurance
Critical illness/health insurance
Loss of earnings insurance

However, if you have enough savings to pay off your mortgage, what are you waiting for ?
Pay off your mortgage

NeatRoseOtter · 31/10/2025 23:35

UC isn’t going to cover running a home. If you've got the sort of home that needs "running" perhaps not, however otherwise it's manageable.

Doggymummar · 31/10/2025 23:37

Job seekers allowance is not means tested, so yes you can. Universal credit is means tested so you can't claim that

BananaOrangeTang0 · 31/10/2025 23:39

JSA is about £92 per week, per adult over 25

That needs to pay all that persons food, bills, transport, everything

NConthe · 01/11/2025 00:00

Yep. Friend living in her very equity rich house and entitled to full benefits. Also gets a decent pension which is exempt from consideration because it’s an army pension from her violent ex who died young (and no, he didn’t die in active service)

MossAndLeaves · 01/11/2025 00:04

If you have between 6-16k you would qualify for a reduced amount still I think?

Work out what you actually need in savings and pay off a chunk depending on how much savings you have. Pointless having tens of thousands sat there whilst you're paying interest on a mortgage as the primary issue.

IsEveryUserNameBloodyTaken · 01/11/2025 00:04

Timeforhector · 31/10/2025 21:26

I thought you could if you have no income and no savings even if you own your house outright?

Show quote history

You can.
Poster is wrong.

reformidontthinkso · 01/11/2025 00:11

PrincessofWells · 31/10/2025 22:01

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.

What happens if your UC claim ended because of savings but you move house and use some capital for this then go below the 16K? Is that deprivation of capital?

NConthe · 01/11/2025 00:17

reformidontthinkso · 01/11/2025 00:11

What happens if your UC claim ended because of savings but you move house and use some capital for this then go below the 16K? Is that deprivation of capital?

Show quote history

No

BringBackCatsEyes · 01/11/2025 00:21

NeatRoseOtter · 31/10/2025 23:35

UC isn’t going to cover running a home. If you've got the sort of home that needs "running" perhaps not, however otherwise it's manageable.

By running I mean paying all the bills and upkeep.

XenoBitch · 01/11/2025 00:22

reformidontthinkso · 01/11/2025 00:11

What happens if your UC claim ended because of savings but you move house and use some capital for this then go below the 16K? Is that deprivation of capital?

Show quote history

I know someone that did exactly that. They inherited a house, so sold theirs (they wanted to move into the inherited house but it needed a lot of work). As soon as the money from their own house sale hit their bank account, their benefits stopped.
Renovating the new house was not classed as DoC (it had belonged to an elderly man and was very neglected. She had to rent somewhere whilst the work was being done).
Her benefits started again once her money went below £16k.

Friendlygingercat · 01/11/2025 00:28

Capital can be used to pay down debts without it being classed as deprivation of assets. This usually applies to loans, credit cards, car finance etc . However if you were to pay off your mortgage just as you were made redundant it might trigger an investigation. It would depend upon the circumstances. You are allowed to claim UP if you own your own home. Capital can also be used to pay for essential home repairs but not for improvements. For example if your boiler/heating is old and needs to be replaced or the roof needs repair. You are also allowed to replace household essentials such as white goods or basic furniture such as beds. But buying a snazzy new kitchen might be questioned. As others have pointed out you would need paperwork/quotes to show that the expenditure was genuine and not not excessive.