Savings in my name stopping Universal Credit despite low income

[slowingdown1]

can anyone more financially savvy than me help?
Recently divorced, ex DH pays minimum child maintenance. Have a low
income due to home working in low demand role so I can care
for 2 x disabled children. Yearly
salary is £31k before tax, I save £100 monthly into pension. I claim Scottish disability payments for both kids which go on private treatment / therapies. Each month I scrap by and have a constant low credit card debt despite my best efforts. I have savings that were gifted to me by my mum as long-term financial security of £80k. Although the money is legally in my name, I have made a firm promise to her that I will not use it, so morally I do not feel able to touch it until she is no longer with us.
My current income is low, but because these savings are in my name, they are preventing me from applying for Universal Credit as above
the threshold.
I understand I can’t eg transfer the savings into trusts for my kids as this would constitute deprivation of capital. I can’t ask my mum to eg take it back for the same reason.

We used our savings to buy a house then applied for universal credit, they checked it all out and said it was fine, didn't have the slightest issue with it. Why don't you speak to the bank and see if you can pay off the rest of your fixed term so you can stop paying your mortgage for a few months. Our mortgage company said we can do that. That our overpayments cover us as paying in advance of we then don't pay a month

The CAB advice is wrong, seriously wrong. DWP rules specifically make the case for paying down debt. Vulnerable people should never be advised not to pay off high interest credit card debt.

80k in the bank and 10k on credit cards = net worth of 70k

70k in the bank and 0 on credit card = net worth of 70k

The above is not deprivation of assets.

OP, multiple people are advising you to pay down your debt. UC aside, this is absolutely the right thing to do. This protects you should you be made redundant. Also, complete the house upgrades such as the wet room. You may not be able to physically lift your children as all of you get older. Needed house upgrades and maintenance is not deprivation of assets.

If you are struggling surely this is the difficult time you need the £80k for, what is the point in hoarding it?

Use the money to pay down your mortgage, and then reduce your mortgage payments, freeing up more disposable income each month?

Me personally I’d pay most of it into my mortgage so your payments will be less per month, that would massively help you in the future. I’d leave £16,000 in the bank for an emergency.

You promised your mum. But that was when you were well off. Just start using it, she doesn’t need to know. She won’t care

Where is the interest received in your calculations? At 4.5%apr you would be getting £300 interest per month.

So transfer 1k per month to your current account as you are struggling. UC cannot claim you are doing anything wrong if you simply spend it gradually to help your family. Eventually you will be able to claim UC. Keep your paperwork in order so that you have a trail. Nothing to stop helping your mother every month once you have a plan in place. Just don't rush out and book a cruise or a major renovation. That's a red flag to UC. Btw it's not frittering when you spend money your family needs you to spend.

I wonder if you realise how lucky you are to have a job paying that much when its part time? A lot of people earn that and work full time

Your children's disabilitity payments pay for medical needs and therapies and then you say you pay another £400 on top every month for more medical needs and therapies, what are these?

Of course you don’t need benefits when you have £80k in the bank! Go and work full time and use your savings instead of expecting the taxpayer to subsidise you.

How would you feel if I posted to say I earn £100k but would like build up £80k in savings so I am living so frugally I need UC to top up my income so that I can afford to eat.

I’d assume everyone would tell me I’m ridiculous and UC isn’t for that.

But it’s an almost direct parallel to your scenario.

This question came up on scope. Someone links to the sections of UC policy that state paying off debt isn’t deprivation of capital with universal credit.

forum.scope.org.uk/discussion/119526/universal-credit-deprivation-of-capital

I think the advice you're getting is not what you want to hear OP.

Even though it goes against the promise you made to your mum when your circumstances were different, you will need to use your £80k to pay off your credit card debt and pay off some of your mortgage to lower your payments (if you have one) or use it to help you buy a property. Not so that you can then apply for UC, but so you can stop scraping by each month.

Write off the idea of applying for UC, it is not for you. The thresholds and rules are there for a reason - to ensure the money only goes to those who really need it and have no other option. You have £80k and while I appreciate it's not how your mother intended you to use it which is upsetting for you, that's just how it is.

OP, with respect, im a full time working single mum on 10k less a year than you (term time admin) and I dont get benefits because I have over the threshold in savings. When I feel grouchy about it, I remind myself how awful it would be not to have a buffer. Benefits are there to save families from destitution. When you have healthy savings, you arent at risk.

The whole concept of morally seems to break down for some people when it comes to maximizing their take the rest of us!

How old are the kids? Once they are a certain age you would lose all the UC for them and probably not get any. Might be worth keeping some of that money because it will be their UC claims.

Yes you're missing the fact that paying the mortgage is not "frittering it away" and instead you expect tax payers to pay your mortgage for you so you can preserve your savings.

You need to use the savings. I completely understand why you feel bound by the promise you made to your mum, and I don't doubt that it puts you in a difficult position. But ultimately, taxpayers shouldn't be expected to fund your living costs while you have £80,000 in accessible savings that you're choosing not to use because of a personal agreement.

You've also been given incorrect advice about deprivation of capital. Deprivation isn't using your own money to pay off legitimate debts, cover household bills, or meet everyday living expenses. That's precisely what savings are for. Deprivation of capital is deliberately giving money away, transferring it, or otherwise reducing your assets mainly to become eligible for means-tested benefits.

Universal Credit is designed as a safety net for people who don't have the means to support themselves. In your case, you do have substantial capital available, even if you understandably don't want to touch it. That's a personal and moral decision, but it doesn't mean the taxpayer should step in instead. If your mum intended the money to provide long-term financial security, helping you through a period where you're struggling financially is exactly the sort of situation that security is there for.

This attitude is exactly why our benefits are such a mess. Nobody wants to pay for themselves anymore. You have £80k use it.

She’s in Scotland. That’s money that will go a long way in Scotland

Surely this thread cannot be real?

31K is not 'low pay'. You also have savings and receive disability payments for your kids.

There is no reason why you should try to get UC.

She can’t put the £80k in an ISA one one go. The limit is £20k a year.

Morning and thank you all so much for taking the time to advise me. It sounds like either I’ve misunderstood the advisor or perhaps he wasn’t quite right or a mix of both, and that using the money to pay off existing debt would be allowed, as would taking some out monthly to help cover our expenses. Thank you.
I apologise if I’ve missed anyone’s question; to answer as much as I can: my ex pays £110 CM monthly which is court ordered. No spousal maintenance. I work 39 hours a week and the cost of carers (DS requires 2 if they leave the house due to lack of impulse and aggression) is significant. I would love to do further education but simply don’t have time or carer cover to manage it. I got a degree and masters in my early 20’s so feel glad for that. My job allows me to work remotely which is vital when we have endless medical appointments and inpatient stays as it means I can work from the ward. My kids are 9 and 14.

I think there may be some misunderstanding in the advice you recieved. You should have been told that you can't deliberately spend the money in order to be eligible for benefits.
You can however spend the money however you wish, and when it reaches the benefits threshold a decision maker would look at your bank statements to decide if it was normal spending or deprivation of capital.
The decision is somewhat subjective, but generally unless there's red flags like big gifts, and the money has reduced over a reasonable time frame its not a problem to use it to top up low income then claim when it's reduced.
I realise this isn't what you want to do, but your goal of keeping your money and claiming now isn't achievable.
Not sure why CAB drscribed this as a catch 22. Thats misleading.

Thank you, that’s reassuring to hear.