To wonder why the UC savings threshold is £6,000?

[GiddyLurker]

Why is the Universal Credit savings threshold set at £6,000? What’s the reasoning behind that number?

It feels quite specific and I just wondered whether there’s a particular logic or policy decision behind it?

Doesn’t this prove that the system has got far too complicated and needs reform? Something isn’t working at the moment. A family with a disabled child and struggling is exactly the sort of family that the state should be helping. Of course they should be able to save for special adaptions for their child an honestly I am of the view that the state doesn’t go far enough. I’d divert a much larger size of the pie to this group.

but debates like this come up because clearly there is an issue with benefits and incentivisation to work for those who can. I think benefits should be a safety net and so after 6 months having a baby you should be back at work (like I was). My baby, my responsibility to pay for it. The money should be diverted into heavily subsidised childcare to allow people back to work easily. I can see people who are forced back into work because they can’t claim any UC after having their child would be annoyed that a family with multiple children have got the ability to save when they can’t and potentially put towards a mortgage deposit or a holiday.

the topic is very nuanced according to circumstance .

That answers your question then, you have to borrow. I know not everyone can easily do that but in your case you had a solution

To those saying work hard and don’t have these savings

If you are working hard and don’t have several thousands in savings

YOU ARE BAD WITH MONEY!!!!!!

of course they are exceptions, but most of the time you are.

working hard=being good with money are two different things

I have so many friends and family who complain they have no savings but then they make fun and tease me and my family, our clothes, our home, our lifestyle.

”i could never live like that!”

but then ask me for loans and go funds me

I lived in minimum wage broke asf but always had at least few k

they would never live like that

what are you going to do when there’s a funeral? What are going to do when you need to move somewhere? Moving costs?

I used to loan them but now nope.

so if someone says I work but I don’t have that, SHOW ME YOUR EXPENSES FIRST

im not buying it

Im in stable employment but you never know what's around the corner, im seriously considering buying a bar of gold whilst times are good and tying up some savings in there. If i need to cash it in in the future a trusted relative could take the payment from a buyer and siphon out small bits of cash to me each week.

Yeah until it happens to you. Or your child. And it can, don’t it it can

My very healthy young athletic relative just got diagnosed with MS.

and then someone dies and you can’t even pay a funeral
or for something disabled person needs in house
or private renting need to move and can’t pay upfront deposit

etc etc

then you wouldn’t be saying that

But the point they were making is that these schemes are not available to people who you think might be eligible . There wasn’t a scheme I qualified for last year when I had to replace my boiler

Because once you breach £6k savings people shouldn’t be being completely supported by the state. People shouldn’t be on UC and allow themselves to build savings, pay for yourself.

What I've never been able to establish (and I have a rummage through the internet) is whether people who were allowed to buy council homes back in the 80's, and possibly also on benefits, had a larger savings limit that allowed them to save for a deposit. Although 6k was probably a decent deposit back in those days .

The amount of people who think that benefit claimants can afford a big loan to get something like a boiler or a new car is mind boggling.

They aren’t completely

uc reduces after 6k

A lot of you are forgetting the 6k savings

THE MONEY IN YOUR CURRENT ACCOUNT SUCH AS RENT AND BILLS COUNT AS SAVINGS

and salary if you work etc

so actual savings are way less

What about other cases? People who can’t borrow?

As recently as 2015, you could have an infinite amount of saving savings in the bank and still be entitled to tax credit credits
This is yet another Tory air brained idea because they deplore the idea of the working class being anything other than working class and on their arse

I wish there was an exemption for an account product to save towards buying a house to encourage the long term improvement of circumstances

Used to?

My adult child is disabled and has 20k in the bank, because they are too disabled to buy anything and their PIP and LCWRA built up fast.

I don't mind them only having PIP as an income but I do wish - like for families with children under 12 - that disabled people unable to work due to their disability could build up NI stamps. It was only when DC had been 3 years with only PIP as their income that I discovered that they are not getting NI credits, and that it's imperative that we set up a private pension for them.

I want there to be a disabled person's UC arrangement that confirms entitlement to LWCRA and UC but with a nil award, so that DC like mine can still get a full state pension. As is, we are being encouraged to buy a load of stuff to get the money below 16k and then restart the application, then have to stop the claim again when it gets to 16k, spend more money needlessly and restart the claim and so on....and every time the LWCRA process is lengthy, beaurocracy, and distressing for my DC.

The problem is that benefits have become a lifestyle choice in many instances to the extent that people don’t want to work harder/do more hours because then they’ll lose their benefits, which are essentially a tax free income because you get to keep all of it, which in turn enables you to save whereas the person earning the same amount is having to pay tax on the amounts the benefit claimant is not.

So benefits should firstly be taxable. They should be an income in the same way a salary is.

I know someone who earns 26k in benefits, that’s including housing benefits etc and some disability benefits, but he actually admits that he’d like to work but then he’d lose the income, because he’s essentially on a 32k salary given he doesn’t pay tax

Added to which, child support should be taken into account when you receive benefits. Why isn’t it?

The person whose ex doesn’t pay child support isn’t paid extra benefits, so why should the person who is receiving child support essentially receiving extra at the taxpayer’s expense.

We need to stop looking at it at benefits bashing and see it for what it is. A wrong system which encourages unemployment rather than the other way around.

There is no doubt that there are people who need to receive benefits. Long-term if they literally are incapable of work due to long-term illness or disability.

But nobody else should be claiming benefits full-time for any longer than six months.

And the salary threshold needs to drop massively in order to receive them, and people need to start taking some personal responsibility, if you can afford Netflix/amazon prime/disney plus/to shop in Ocado then you can afford to save.

There are some corners which can’t be cut, energy bills/rent/council tax.

But there are some which absolutely can.

I see the Labour bots are out in force again, racing us to the bottom. But while we’re bickering over a few quid, it’s distracting us from the fact that our energy and food bills are about to spiral out of control… won’t affect the billionaires tho.

But surely that’s unfair and was rightly stopped. What is your reasoning for not stopping it? The point of savings is to tide you over during the lean times and you save in the better times. If someone was able to save then why shouldn’t they be forced to use those savings before the safety net of the state kicked in?

Not allowing savings definitely traps people renting which increases the benefit bill.

I also agree that you need contingency money - if your landlord decides to sell you need to be able to pay deposits and rent in advance, plus moving your stuff. You need a repair on your car to get to work etc.

Not only is this ludicrous, it’s in no way relevant to the discussion around government savings when UC claimants buy instead of renting. The landlord isn’t the claimant, the tenant is, and the intended purpose of the rent contribution is for the benefit of the claimant in helping them pay the rent - any contribution to a landlords’ mortgage is indirect and unintended. The UC contribution is also capped according to the claimants’ circumstances, so it will only pay a proportion of the rent, and by extension the landlords’ mortgage, the tenant has to find the rest.

There is no direct provision on UC for help with mortgages in the same way as there is for rent. The only thing actual homeowners can claim in relation to help with mortgage payments is SMI - support for mortgage interest. It’s not a benefit, it’s a loan that has to be repaid with interest, it only pays the interest on the mortgage, not the capital, and it’s usually limited to interest on the first £200,000.

You're missing the point. I am indeed fortunate that my daughter was in the position to lend me the money.
What about those who are in crisis and have no-one to borrow from?
Should they go without heating and hot water? Or should they be allowed a savings cushion?
I genuinely can't believe what I'm reading on this thread.
The lack of empathy, understanding, and knowledge that any one of us, any day can become jobless, disabled, long term sick is truly shocking.

The housing benefit element was still £16,000 so that was irrelevant
But if they could keep the savings and the top up of salary, chances are theyd buy an asset and remove any need for housing benefit which is the largest component of UC
It made sense

It’s depressing and infuriating how out of touch some posters are. Unfortunately it’s the same on any benefit bashing thread. I’ve also noticed a lot more of these threads surfacing under the guise of the OP’s ‘concern’ when in fact it’s just an excuse to goad people into having yet another go at those less fortunate than themselves.

Mobility allowance. Schemes like motability for the car (which several of my family members have accessed), ECO4 or LEAP, grants for the boiler. Again which family members have benefitted from.

No one wants to see people with disabilities at a disadvantage.

Like other have pointed out, UC is to provide support. If someone can save 16k (or even 6k!) on it then they probably don’t need it. It’s not meant to replace the benefits of working/working full time - and yes I know some people on UC ARE working , but 67% of claimants are not in employment, and half of these are not due to disability, illness or caring duties.