Universal credit

[PlanetTeaTime]

Please help

My brain is mush and I've been on some calculators but they ask about this financial year gone to calculate it and it confuses me

I'm trying to figure out our finances to see what our income would be if I stayed at home with my baby verses going back to work so I can make a informed decision

Just on my partners wage, our household income is £30K a year before tax

We have savings of £35K and own our own home

Would we be entitled to anything?

(Just to clarify, the recent widow I'm talking about isn't me (I have been recently widowed but thankfully am already on the property ladder), but someone I know.)

[quote peachgreen]@toastantea Okay, here's an example. A recent widow struggles day-to-day because she is now supporting a family on one salary. Her salary is poorer than it could be because she stalled her career to raise a family / works part-time due to child care commitments etc. She receives a death in service payment from her late husband's employer of £20k. It's not enough for a deposit on a house and she can't get a mortgage on her salary. But equally she can't save it and add to it because having it means she's not entitled to UC. Her only choice is to run the savings down until she's entitled to UC, at which point she has no hope of ever building it up again and so is stuck renting forever.

And that's just one example of where the rule can be "a bit shit".

Like I say, I'm not sure what the solution is. But I believe it discourages people from saving and in the long run, that costs both them and the state money.[/quote]

Why does the widow suddenly need to buy a house when they have been renting with their husband and children before his death?

Just an example.

I understand fully the limitations of the savings, but the other side of the coin is paying benefits to people with thousands upon thousands in the bank, there has to be a line somewhere.

@peachgreen

(Just to clarify, the recent widow I'm talking about isn't me (I have been recently widowed but thankfully am already on the property ladder), but someone I know.)

Cross posted with you.

I didn't realise your example was a real life person. I realised the why question, please ignore that, I genuinely thought you were being hypothetical.

Because previously they had two wages and could a) afford the rent and b) were saving for a deposit. Now she can't afford the rent on her salary so will have to claim the housing benefit portion of UC once she's run down her savings - whereas if she was allowed to keep her savings and build up a deposit she could get an affordable mortgage and not need UC in the future. It's a very common story.

I do get what you're saying - but while rents remain higher than mortgages, and buying a house requires such a large deposit, it actually doesn't always make financial sense for the state to make people use up their savings on day to day living and then be forced into a lifetime of unaffordable rents.

Oh, sorry, cross-posted again there!

I do totally get where you're coming from and I don't know what the solution is. But the current system is a) keeping people in poverty and b) not doing the state any favours long term.

@peachgreen - has your friend looked into shared ownership? Putting down huge deposit for purchased %. Mortgage for the rest of the purchased % and cheaper rent on the rest?? UC pay shared ownership rent part. For example. We are happily living in our new 2 bed terrace. Total price £128 000. Bought 40% for £50 000. So if I had £20 000 deposit I would only need mortgage for the remaining £30k. Rent for remaining 60% is £200 pcm. 🙂 We are in Midlands I recognise prices vary hugely but shared ownership is subsidised. Ours is a lovely house 🙂

With a household income of 30k I doubt you'd be entitled to anything anyway.

Thanks @dontfuckingsaycheese, I'll recommend that to her. It's tricky to make these big decisions so early on so to be honest by the time she's ready to buy she'll likely have used up her savings anyway. But I'll speak to her.

OP you won't be entitled to anything other than child benefit, because as a home owner with substantial savings you are significantly better off than most people in the country.

Hopefully you can make it work the way you want, I love being a SAHM and in my opinion it's worth the financial sacrifices we have had to make.

Savings of over £16k will make you automatically ineligible.
We have a combined salary of £54k both full time and still get £1,000-£1,200 UC a month. It all depends on circumstances.

@Pinetreesfall

Savings of over £16k will make you automatically ineligible. We have a combined salary of £54k both full time and still get £1,000-£1,200 UC a month. It all depends on circumstances.

I assume you must have very high rent and/ or childcare costs or have disabled children to be receiving that amount of UC?

@Babyroobs rent isn't particularly high - £1k. But childcare costs hit the cap each time at £1,108

[quote Pinetreesfall]@Babyroobs rent isn't particularly high - £1k. But childcare costs hit the cap each time at £1,108[/quote]
Gosh 1k in rent seems enormous to me ! We have a similar income to you and 2 dependent children but would receive nothing as no rent or childcare costs.