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?

Tbh the most logical solution is to carry on as we are re homeowners being equally eligible for benefits they don't have to pay back and for the savings cap to rise with historic inflation. Then we can start to think about how to protect savings for deposits, the cost of which has surely risen higher and faster than any government of three or four decades ago could possibly have imagined! It's not unreasonable to save for a deposit and also have some savings for emergencies.

It’s pointless arguing. The poster clearly despises homeowners. There’s a simple reason the home you own and live in isn’t included in the capital calculation for benefits. It’s because you need it to live in.

I’ve seen some ill considered ideological crap spouted on MN, but this definitely wins the internet prize for the most ludicrous, unfair and unworkable suggestion ever. We all pay tax and NI to pay for benefits when we need them. Asking homeowners to effectively pay twice won’t fly.

Totally agree.

You're conflating assets that are available now (the renters savings) with assets that may become available to a person at some future point, if they no longer need their home, so comparing house equity to savings is not like for like.
What you're actually suggesting is that if people on benefits have the potential to come into money at some future point, that money should repay the benefits they claimed.
If you're going to use this as a principle, then it's going to get complicated as it would require erstwhile claimants to be monitored (for life?) to identify any financial gains. Getting a job, coming into an inheritance, saving a pot of money later in life, winning the lottery...
While I understand the principle, it's simply not practical across the board.
And to impose the rule solely in respect of existing house equity is unfair, as it disadvantages home owners by comparison to say, renters, who after a period on benefits get a well paid job and inherit a property.
I'd also question how many people you think are actually in these circumstances. Because they would need to be people who once worked to afford to have paid a mortgage on a substantial prooerty, and now, if a couple, neither can work. How common do you think that actually is?

Exactly and what's the plan i will be on uc for life due to disability so make me homeless i then have to rent somewhere which means I then claim the rental part of uc which means all of sudden instead of getting £800 a month uc il suddenly be getting say £1500/£2000 a month yeah that will really save money 🙄

I don’t think this person despises homeowners. I think they desperately want to become one.
And I can understand how they feel that the game is stacked against them because it really is
However, if everybody just stuck to the premise that you must secure your housing situation before you have children that is just an absolute non-negotiable, people would be better equipped for whatever life throws at you

But making others homeless won't get her a house only she can change her circumstances

"However, if everybody just stuck to the premise that you must secure your housing situation before you have children that is just an absolute non-negotiable, people would be better equipped for whatever life throws at you...."

The birth rate would collapse if we tried that. The list of regular jobs that don't pay enough for a deposit and mortgage is as long as your arm.

Yep I agree. And anyway, how do you secure your housing situation? It's contradictory in a society where social housing on a lifelong tenancy isn't an option. Even if you own your house outright, your relationship might break down or your property may become unsuitable for changing mobility needs. People get ill, they split up, they lose their jobs, they get evicted. Secure housing as a condition of having children defies the whole basis of our welfare state which is meant to provide compensatory measures against adverse events. Start bringing in that kind of nonsense and watch it disappear before your eyes!

Then so be it
or we return to hundred percent mortgages or we return to house prices being obtainable in shit areas for three times the shit salary being paid to people to live in shit areas
I wouldn’t live where I grew up for all the tea in China
But there’s parts of it I couldn’t afford to
Actual madness

So the first thing you advocate shouldn't happen, on an ethical basis. The second and third can't happen on an economic basis (the UK economy being dependent on high house prices and all).

What now?

Before the current, flat rate, pension was introduced, about 20 years ago, there was far more means testing in the system. This resulted in just the kind of resentments you can see in this thread about UC. It would also prove a significant disincentive to save for your retirement, unless you were likely to be able to save enough that the state pension was irrelevant.

If you consider two people, reaching retirement age, who have both always worked in similar, low to moderately paid jobs. One has always saved for their retirement and put aside as much as they could afford. The other, had far more fun when young, and spent their money on holidays, evenings out etc.

With means tested pensions, the one who had saved, but hadn't earned enough to have a lavish pension, would get little or no support from the state pension but wouldn't have been able to save enough to enjoy a lavish pension. They'd end up with much the same amount as their neighbour who had frittered their salary away throughout their life.

With a flat rate pension though, the person who has saved for their retirement gets to enjoy a more comfortable old age than they would if they'd spent the money in their youth.

But the homeowner is a taxpayer themselves up to the point of claiming benefits (and some benefits are taxable). They have paid for the benefits they’re now claiming by way of tax and NI, according to the social contract, which is that you pay into the system when you’re in employment so that you have a safety net when you’re not. What you’re proposing is that homeowners pay twice.

The problem with the homeowner paying twice as it becomes a pyramid scheme then, which if it already is if we’re honest
But if you don’t give people the opportunity to get ahead, there’s no carrot and there’s no incentive and then everybody just becomes apathetic to capitalism which again I’m not saying it is a bad thing but it doesn’t seem to be popular with the masses at the moment maybe we’ll get to that stage

For care, that families assets would be accounted for, why not for means tested benefits? A charge put on when sold? If it’s short term the charge be minimal.

Because you pay for care yourself according to your means, and self funders in care are contributing from their own savings pots to top up those who are LA funded. There are no national insurance schemes you can contribute to for full time residential care. Unlike benefits which are funded by national insurance and taxes which homeowners will pay just like everyone else while they are in work, to provide a safety net when they are not.

So what you’re proposing is to charge homeowners twice.

You are also forgetting that if a home owner falls out of work and claims UC there is nothing they can claim for housing costs, whereas a renter will have a proportion of their rent paid by UC, so where is the perceived disparity ? The homeowner has ensured they will not be reliant on the state for housing costs, the renter has not. I’m not saying that’s a bad thing, it’s down to individual circumstances and means, but punishing homeowners for trying to provide themselves with secure housing is a race to the bottom.

How many have a house worth £1 million and claim UC? I presume the mortgage payments are pretty big if they haven't paid the mortgage off. UC won't be covering that.

👏👏👏. There were also approximately 500,000 claimants for whom there is no work requirement because they are carers for disabled friends or family, and have their carers allowance deducted in full from UC and replaced with £48 a week carers premium. A princely sum of approximately £1.37 an hour for caring for someone 35 hours a week. Some people really have no clue.

And they would of likely been a high taxpayer before something awful happened to them to end up on uc so they absolutely deserve uc

UC doesn’t cover anything for mortgage payments at all. The poster advocating for homeowners to pay back benefits they claim seems to forget that that’s the difference between homeowners and renters. The former doesn’t pass on any housing costs to the taxpayer, the latter does.

In the short term, the home owner on UC may well be significantly worse off than their neighbour who is renting. Leaving aside any mortgage that they may, or may not, need to pay, they will be responsible for any maintenance needed on their home. The renter, on the other hand, will be able to pass that liability on to their landlord.

Yet millions if people with huge savings claim state pension which is the largest expense in the welfare budget.

I don'y know why this line is constantly trotted out on MN.
I am not a pensioner nor do I claim benefits, so i have no skin in the game other than - like everyone else - i will get a state pension eventually.
State pension is a universal benefit that everyone expects to get (I know there is not a pot with my name on before someone points that out) as income in old age when people are not able to work.
Welfare benefits are dependant on certain conditions and are paid to people who, all things being equal, should be working.
To argue - as many do - that the state pension should be means tested yet at the same time say the £16k savings limit is not high enough for UC claimants makes no sense at all.
Of course, a lot of this talk is driven by spite towards pensioners, which is a new phenomena and founded on the assumption that today's workers will not be as well off when they are pensioners (which will obviously be true if the pension is scaled back the way some want it to be).
No one knows what is going to happen in the future, yet today's workers seem to think everything is static. I am coming to the end of a £90k mortgage on a house now worth £350k, yet spent a good few years in the 90s when my house was worth less than i paid for it. Look up negative equity.
You know all those MN bitching about their parents 'hoarding' their cash? They will inherit that 'hoard' one day. And if they managed to buy a house (two of my children are homeowners by buying a small flat crucially before they started a family), that house will go up in value (I know prices are stagnent atm but that's NOW) and before they know it, they will be one of those despised 'greedy pensioners' they hate so much.
You can't base policy on spite.

I don't disagree with you about pensions, and I would take your final sentence and equally apply it to working-age (and child) disability payments.

Many many people on Mum’s net and in the real world will not receive an inheritance so then that’s gonna push the gap between the have and the have knots even wider on a more large scale basis.
Out of my auntie’s and uncles 3 out of 4 of them will leave substantial amounts of money to their children
And the ones that had dreadful upbringing with awful abusive parents who did nothing to help them and don’t feel in any way obliged to help them after their deaths will get another blow when they have to watch that.

To be fair though, policy around pensions is largely based on keeping their vote.

I don't argue for pension poverty. It's still undeniable that the reason for the triple lock is not concern about people in their later years. It was based on the hope of the coalition government - following an election where the Conservatives couldn't get a majority even after 13 years of Labour govt. - that they could persuade older people to keep voting for them. Why otherwise, through years of "austerity" and claims that benefits were too generous, was the triple lock left alone? Labour dared try to remove the WFA presumably because they're not as concerned about the older vote, being, traditionally, a party with a younger voter base.
Anyway, if TL:DR, I don't believe policy is based on spite. I believe it's based on ideology which is not always overt.