Universal credit- help, I'm panicking!

[FireAndRain45]

I'm pregnant and will be going on maternity leave later this year, it will be statutory maternity pay so not much money at all. My partner works full time and earns about £18,000 a year.

I thought I could claim child tax credits but have realised we're in a universal credit area and as far as I can see we'll get nothing because we have savings over £16,000. We've been working our arses off for years to save for a house deposit as we're in rented accommodation.

Does this mean we'll have to spend our house deposit on living costs? And that actually we'll never be able to save for a house and receive tax credits because if we're over £16,000 then we won't get anything? I can't see how on earth we'll ever cover living and childcare costs in the future without losing most of the deposit. Feel like the dream of owning one day has just gone and I'm panicking slightly.

Feel really ignorant that I didn't look into this before 😟

Yes this is true. You cannot claim UC if you have savings over 16k. When it falls below 16k and is between 6k and 16k then it is reduced by about £4 for every £250 over 6k ( if that makes sense ! ). UC is very different to tax credits where you could have potentially 50k in savings and you only had to declare interest over £300 per year.
I don't even think it's worth trying to hide savings as they seem to be able to find out !!

Would it be possible just to take 6 months mat leave to minimise spending? Then as soon as you are back at work you could approach a lender re: mortgage.

It will be tricky as I imagine you will not even get any help with childcare costs whilst having over 16k in savings. It just would not let you open a claim at all.

We would be stuffed too if we both lost our jobs too as we have some savings. Despite having 4 kids and never having claimed tax credits for the past 15 years we would not be entitled to anything if we were both to lose our jobs tomorrow because of this rule. We are in our fifties, my dh is unwell and the bit of savings we have was inheritance from losing both his parents close together. If he has to give up work due to ill health ( which is a realistic possibility), and we were reduced to my meagre earnings then we would not get any help.

This, unfortunately, is what happens if you have a baby before buying a house, childcare costs eat into any spare money you might have. Unfortunately you'll have to spend some of your deposit on a house. It's a lot harder now, as the norm is to have longer maternity, years ago you only got 3 months, and childcare costs have rocketed too.
Is it at all possible to buy a house quickly (new build perhaps? borrow rest of deposit from someone?) such that you could move in before the baby?

Or you could do what thousands of families have to do and work around each other to save on childcare costs. We have done this for 15 years because childcare costs were too high. There is a lot more help these days with childcare - at the age of 3 you can get 30 free hours if both parents working I think. Sorry I know this doesn't help you in the meantime !

you will get child benefit of £20.70 per week which is separate to UC.

Fire, you could do what I did - go back when the baby is 2 weeks old full time to work and that way you don't have months on very low SMP and it solves your issue entirely.

Thanks for replies, unfortunately my job isn't well paid so it wouldn't make financial sense for me to go back early. When childcare costs are factored in we'd be worse off than on maternity I think or not much more. Luckily I have some freelance work that I can do when the baby is a bit older, in the evenings when my partner isn't at work that won't affect my SSP as it's for a different company.

Don't think we'll get a big enough mortgage while I'm pregnant/on maternity 🙁 but we are going to apply for a discounted property scheme which wouldn't need a big mortgage, we could be waiting a long time to get anything but better than nothing.

I can understand that they don't want rich people to get benefits but this massively penalises low earners/renters who want to own a house one day!

Yes it does seem reasonable not to give benefits to someone with over 16k in savings. As others have said it would have been much better to get a house first and then have a baby although I understand life doesn't always pan out as we expect.

Yeah it's not ideal, we're not married yet either (engaged though, and planning it after the baby). But got told by the doctors that it was now or never to have a baby due to early peri menopause at 30 so we had to go for it!

Good luck with everything. I'm sure it will all work out ok. I had to go back to work when my eldest was 4 months part time , and it was ok just not ideal.

Yo might be able to work full time at weekends too whilst your partner minds the baby from within a few weeks which might bring in some extra money. SAlso if you want a mortgage soon wouldnt' it be better to go back to work even if neither you earns much once you pay 50% of the child minder fee or nursery fee each so that you maintain two full time employed salaries at least until you've been able to buy that first studio or one bed flat doer upper that gets you on the housing ladder?

You could look at expanding your freelance work - I've friends who started internet trading companies, who worked as Virtual Assistants, who did checkouts for rental properties and/or typed the reports, who wrote novels, who became childminders etc to earn extra/an alternative income

If you're only early 30, you still have plenty of time to go for a house. Remember, you'll most likely have to work until your 67 if not longer.

You do have options, you just can't have it all. You have a baby now and that's worth waiting another year or so to get a house.

I think a lot of parents relying on tax credits forget that it is people's taxes that contributes and many of these people can't get the things those who claim it think they should be entitled to.

Any chance you could buy something now, even if its not what you're after long term, as a starter property? I think some benefits ignore savings for specific reasons such as house purchase, but sadly universal credit doesn't seem to.

The tax credit system needed to change. People could own their own home outright and work just a few hours a week between them and still get hundreds of pounds of free money to boost their pay whilst others worked full time and paid for their luxury. Totally shambolic system that needed to change.

I feel sorry for people having their babies now. I had babies ten years ago and bought a house with 100% mortgage, tax credits was counted as income and I used tax credits income towards paying the mortgage. Now equity isn't considered for calculation purposes but savings is. I don't see how people can ever improve their situation if savings are held against them. People can blow their tax credits on whatever they like, but if you are frugal and save you are punished.

Buy something small now and work your way up property ladder when you can.

Me and partner bought our 2 bed house with 5% deposit and only put down 11k so potentially you already have enough

Unfortunately because of the tiny mortgage we'd get due to the fact that I'm pregnant and will be on maternity in a few months our budget would probably be less than £140k. That goes nowhere in my city 🙁 even once back at work they'll deduct childcare costs from what they would have offered us, and I won't get help with childcare funding due to these new rules, so it'll still be a low mortgage. Reality of life these days I guess!

You may also need money for survey, mortgage arrangement fee, solicitor fee, land registery, moving costs, emergency funds. Have you investigated all the costs ? There has never been a time when everyone owned their own home. Do you have plans to increase both your wages in the future ?

Yes we've had a mortgage promise and discussed solicitors fees etc with a financial advisor. And yes his job has scope for improvement as does mine. It's all just very bad timing!

Could you look into shared ownership? Invest your savings in part of a house. Then you would still get your tax credits. Aim to buy more of the house in a few years time when you are earning more?