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Original poster

Tax credits to UC and savings

104 replies

Ladylilac · 04/10/2023 05:52

We have to move to UC next year , wouldn’t usually qualify for it but on tax credits get a years grace on savings .
Currently have around 35k -38k in the bank between us, 5k of that is children’s accounts ( in children’s names ) which I’ve been told I need to move to a Isa so it’s not counted is this correct ?
we are buying a used car in the next few months before we have to move over , which will then leave us with around 18-20k so over 16k limit .
what would you do , having discussions with my partner whether it’s worth claiming or not because apparently you have to show receipts and declare what spending our own money on etc
would you withdraw the extra money and keep in house in a safe ? Or spend it ? Was going to put some into rent account so that’s covered for a while but we rent with a HA but it seems that’s set up direct debit so only the correct amount goes out each month.
any advice appreciated

OP posts:
MyBedIsMySpiritualHome · 04/10/2023 06:49

Cross post @Overthebow

You said it much better than me!

PizzaPastaWine · 04/10/2023 06:50

And this is why the country is on its knees.

Original poster
Ladylilac · 04/10/2023 06:52

Overthebow · 04/10/2023 06:47

They’re not entitled to it after the transition period though, they have £35k in the bank.

If you read it properly you’d see 5 k is in children’s accounts it’s there money, 15k going on a car therefore after the first year I won’t have 35 in the bank more like 18k

OP posts:
Potentialmadcatlady · 04/10/2023 06:54

Which is still 3k over what is allowed in savings.

quickqpls · 04/10/2023 06:54

MyBedIsMySpiritualHome · 04/10/2023 06:48

I am concerned about both the political elite and their chums stealing billions and people feeling ‘entitled’ to hide substantial savings in order to claim benefits that are meant for those struggling.

These threads are so unhelpful for those who really need benefits. Many will see this and feel like benefits claimants are ripping the rest of society off. But the vast majority are not like the OP and recognise they are meant to be a safety net, not a way of life.

Agree with your first point, but really your second? Every single person I know on benefits (UC top ups etc) could work more and take less. Every single one.

Not referring to those on disability benefits, obviously.

littlebirdieblu · 04/10/2023 06:54

Ladylilac · 04/10/2023 06:33

Not sure how we are milking the system when worked all life and not claimed anything other than child benefit and tax credits . Leaflet tells us to claim so they want everyone on tax credits to claim and have the years protection . During that first year we will probably spend the 2k/4K so then will be under 16k for the following year , I was asking for advice on the first year but nevermind I’ll find other forums which will actually give advice rather than be angry someone worked and saved without luxuries all there life.
The car itself will change our life no more cold rainy school runs and struggle with shopping etc , our children will be much happier as they also have recent health issues which makes walking long distance harder, cars may be less than 15k where you are but we live quite rurally so prices are high on used cars . Thanks anyway

Hmm the only reason you could save though was because you were getting tax credits. You don't need UC if you have all that money in the bank.

SpaceRaiders · 04/10/2023 06:55

@PizzaPastaWine Lol

Respectfully the country is on its knees because the bloody Torys raided the coffers whilst everyone was focused on covid. Not because Janet is working 40 hours in a minimum wage job and claiming tax credits!

Cloudyrain11 · 04/10/2023 07:02

How do you save up 35k whilst claiming benefits? Never claimed them myself but I thought they were a minimal payment to help people get by?

Pigeonqueen · 04/10/2023 07:07

Just to provide another experience of someone switching from tax credits to UC - we’re a family of 4, dh works full time but in a fairly low income job (he’d love to earn more, and tries to) and I am disabled on PIP on the highest rates long term and cannot work, we have Ds aged 11 who is also disabled and attends complex needs school. We are absolutely bricking it about how we are going to manage to switch because at the moment we rely on the tax credits we get weekly to buy our food, dhs wages and the disability benefits we get just about cover our bills. When the tax credits switch to UC they’ll move to a monthly payment and this is going to be really hard for us to cope with initially. We have zero savings. And a lot of debt (£9k) caused by essential house repairs - we own due to me previously being able to work, we can’t downsize. What I would give to have the amount in savings that op does!

ginandtonicwithlimes · 04/10/2023 07:09

I would be careful. They might see 15k as expensive for a car. You are on benefits and don't see £35k as very much? Personally I don't see why you should get protection when those of us on UC aren't allowed. You might not even be entitled to UC anyway so maybe check first?

Summertime16 · 04/10/2023 07:10

UC will have access to all of your bank accounts, view your spending, movement of money etc so they will see what you spend that ridiculous amount of cash on.

ginandtonicwithlimes · 04/10/2023 07:11

quickqpls · 04/10/2023 06:54

Agree with your first point, but really your second? Every single person I know on benefits (UC top ups etc) could work more and take less. Every single one.

Not referring to those on disability benefits, obviously.

Show quote history

Plenty of reason why people can't.

quickqpls · 04/10/2023 07:16

@ginandtonicwithlimes - I'm sure there are, but the people I know figure they'd only get another £50-70 for increasing their hours, so why bother? The system is broken and being played, I'm not saying I blame the claimants, I was disputing the PP's comment that the vast majority see benefits for what they should be. They don't.

Original poster
Ladylilac · 04/10/2023 07:17

Cloudyrain11 · 04/10/2023 07:02

How do you save up 35k whilst claiming benefits? Never claimed them myself but I thought they were a minimal payment to help people get by?

I saved my money from before I even had a family I worked 60 hours week when I had no children etc so after I paid rent etc I saved up and over the years it built up.
tax credits didn’t take savings into account only receive a small amount a month as partner works full time so income per month is under 1800 .
we are eligible for uc on the transition protection for first year then long term if savings under 16k . I’ve not had move over date yet will be next year and we were buying the car this year anyway

OP posts:
Beautiful3 · 04/10/2023 07:18

Move the kids accounts over to isas, and buy the car. Then you'll be under £16000. I'd do it all now. So when you have your next statement, it won't show the high amount.

PosterBoy · 04/10/2023 07:19

God the pathetic whining

When you move to UC they will want to see 3 months of bank statements and a statement showing the amount in each of the savings accounts.

After that, your claim for UC will go ahead (they still make the normal deduction for the 6-16k savings though).

After a year if you still have over 16k your claim would stop. If you have spent £2k, I don't know but I think they may want to know what on and may say it was deliberately spent to get below the savings.

Easiest could be to put £2k more into your child's junior isa before you switch to UC.

You could invest in gold jewellery as personal jewellery doesn't count. Again though you would need to do that before starting UC

Put it on a holiday for next summer now?

MyBedIsMySpiritualHome · 04/10/2023 07:22

@quickqpls
I have to believe that to try to avoid being permanently pissed off.

I know it is very possibly / likely not entirely true, and like you know two families who take huge advantage and as a result can afford things that we can’t.

The system does need a big shake up to make sure those that really need it can get it but those that don’t, can’t.

But the billions spaffed by the Tories on their mates, and their careful dismantling of the systems we all rely on for their own benefit is also an issue - a much bigger one. I’m wary of being distracted from that too.

Feelingcrazy123 · 04/10/2023 07:25

It’s a joke.

mim sorry I sound harsh but why on earth should you get benefits with that amount of money in your savings?

Plankingplanks · 04/10/2023 07:27

I'm all for everyone claiming exactly what they are ENTITLED TO. You aren't entitled to it because you have too much in savings (Lord knows how).

Mumtotooo · 04/10/2023 07:29

Hey, if you have a years grace with your savings, as long as you spend the extra bit wisely there won't be any issues. I ended up with some savings over 16k and things like a small holiday, furniture, kids clothing were all accepted as reasonable purchases.
We seem to dip in our savings most months now as struggling with the cost of living and they never question it, I just report on my journal at the end of my assessment period what the amount is.

JenniferAllisonPhillipaSue · 04/10/2023 07:36

OP, make sure you don't "jump" too soon. The leaflet is to let you know that the change is coming, but you should wait until you receive the letter telling you that you have three months to apply - if you apply before that letter, it doesn't count as a 'managed migration' and you lose the 'transitional relief' that ensures you continue to receive benefit for a year (and ignores the savings). You can also choose to apply within days of the deadine they set, so extending the wait.

As somebody else said, if you manage to spend so that you have just below £16k savings, you'll still lose most of the benefit as it works on a taper basis above £6k - so it might not be worth having the worry of trying to spend, trying to transfer the childrens savings etc.

I feel for you. Under Tax Credits we could be frugal and save for future emergencies. Under UC you get penalised for doing just that. The thresholds (£6k - £16k) haven't changed in years and certainly haven't kept pace with inflation.

User98866 · 04/10/2023 07:39

How old are your children? I wonder if the biggest adjustment for many is that they will be expected to look for certain number of hours work (min income floor) and you will have to attend the job centre weekly. For a small mount of benefit it might just be easier to actually get a part time job. We claimed a tiny amount of UC through covid when I lost my job and once dc was 3 there was no way I was doing a 30 mile trip each week to meet my ‘work coach’. I got a job instead which to be fair is what the system is designed to make you do!

allhellcantstopusnow · 04/10/2023 07:45

PizzaPastaWine · 04/10/2023 06:50

And this is why the country is on its knees.

No it's not, good lord.

Cloudyrain11 · 04/10/2023 07:54

Cricky I can't save 16k in an emergency fund whilst working full time not claiming anything.

Original poster
Ladylilac · 04/10/2023 07:59

User98866 · 04/10/2023 07:39

How old are your children? I wonder if the biggest adjustment for many is that they will be expected to look for certain number of hours work (min income floor) and you will have to attend the job centre weekly. For a small mount of benefit it might just be easier to actually get a part time job. We claimed a tiny amount of UC through covid when I lost my job and once dc was 3 there was no way I was doing a 30 mile trip each week to meet my ‘work coach’. I got a job instead which to be fair is what the system is designed to make you do!

we will already pass the income floor as partner earns over the 1300 required so will be in the light touch group and not needing to up hours etc.

OP posts:
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