Main site > MoneySavingExpert.com Forums > Work & Benefits > Benefits & Tax Credits > Rent-A-Room scheme and Pension Credit.... (Page 1)

IMPORTANT! This is MoneySavingExpert's open forum - anyone can post

Please exercise caution & report any spam, illegal, offensive, racist, libellous post to forumteam@moneysavingexpert.com

  • Be nice to all MoneySavers
  • All the best tips go in the MoneySavingExpert weekly email

    Plus all the new guides, deals & loopholes

  • No spam/referral links
or Login with Facebook
Rent-A-Room scheme and Pension Credit....
Reply
Views: 2,070
Thread Tools Search this Thread Display Modes
# 1
daysdream
Old 16-09-2012, 7:32 PM
MoneySaving Newbie
 
Join Date: Jul 2009
Posts: 8
Default Rent-A-Room scheme and Pension Credit....

I'm in receipt of Pension Credit and a Basic State Pension, which combined comes to 572 every four weeks.
I rattle around in a four bedroom house and I want to rent a room out to help me financially, plus I'm lonely and enjoy the company of others in my home.
However, on looking into this, I find, no matter how I do the sums, I end up out of pocket if I rent a room.
I want to ask for 350p/m, which is a fair rent for the area I live in. I have contacted both my local Council, and Pension Credit office about how I stand regarding renting a room for 350p/m. Firstly I'm told that my Pension Credit would cease, and if my Pension Credit ceases, then my Council Tax single person allowance will no longer apply, meaning I'd have to pay full Council Tax (at present 138p/m).
This means if I have a lodger to stay I would need to pay full council tax = 138p/m, plus lose Pension Credit = 72p/m plus I'd need to restart buying a TV licence (I don't have a TV at present) = 12p/m, giving a total loss of 222 - this is without counting the loss of benefits having Pension Credit brings - eg: free dental treatment, etc.
This would leave me with c32 a week, from which I'd need to pay for the extra costs of electricity, gas, water another person living in the house would bring.
Am I doing something wrong here?
I'd like to offer a homeless person a safe roof over their head, but financially I'd end up worse off for doing so?
Can anyone else tell me, am I working this out wrong?
daysdream is offline
Reply With Quote Report Post
# 2
nannytone
Old 16-09-2012, 7:45 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Apr 2010
Posts: 8,024
Default

why not rent 2 rooms. then youd still lose the pension credit and council tax benefot, but would gain another 350 a month.
nannytone is offline
Reply With Quote Report Post
The Following 3 Users Say Thank You to nannytone For This Useful Post: Show me >>
# 3
McKneff
Old 16-09-2012, 7:49 PM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Jun 2008
Location: north yorkshire
Posts: 32,102
Default

Daysdreams thread has been directed here from another board but strangely enough, That is exactly what I said. lol
No one can make you feel inferior without your consent
McKneff is online now
Reply With Quote Report Post
The Following 3 Users Say Thank You to McKneff For This Useful Post: Show me >>
# 4
BigAunty
Old 16-09-2012, 7:50 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2011
Posts: 6,751
Default

why not downsize to a 1 or 2 bedroom place? This will reduce bills without the need to have strangers in the place.
BigAunty is offline
Reply With Quote Report Post
The Following 2 Users Say Thank You to BigAunty For This Useful Post: Show me >>
# 5
daysdream
Old 16-09-2012, 9:26 PM
MoneySaving Newbie
 
Join Date: Jul 2009
Posts: 8
Default

Have looked into downsizing and for me it's not viable:-(
daysdream is offline
Reply With Quote Report Post
# 6
Dunroamin
Old 16-09-2012, 11:40 PM
PPR
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Feb 2012
Posts: 15,554
Default

Quote:
Originally Posted by daysdream View Post
Have looked into downsizing and for me it's not viable:-(
Can we ask why?
Dunroamin is offline
Reply With Quote Report Post
# 7
daysdream
Old 17-09-2012, 12:08 AM
MoneySaving Newbie
 
Join Date: Jul 2009
Posts: 8
Default

Hi Dunroamin- yep, no 'secrets':-) I've looked into downsizing and found after I'd paid off the mortgage, the 'ex', Estate Agents/Solicitors, etc, etc, then I'd not have enough to buy myself a tin box, so I decided to go for 'Plan B' - get a lodger in....which means I get to stay in the home I love plus someone else gets to share it with me:-)
daysdream is offline
Reply With Quote Report Post
# 8
Pollycat
Old 17-09-2012, 9:28 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Jan 2007
Location: North East Midlands
Posts: 9,362
Default

Quote:
Originally Posted by daysdream View Post
I want to ask for 350p/m, which is a fair rent for the area I live in. I have contacted both my local Council, and Pension Credit office about how I stand regarding renting a room for 350p/m. Firstly I'm told that my Pension Credit would cease, and if my Pension Credit ceases, then my Council Tax single person allowance will no longer apply, meaning I'd have to pay full Council Tax (at present 138p/m).
Just being pedantic, but for the sake of accuracy, you wouldn't lose your 25% single person discount on council tax because you wouldn't be eligible for pension credit - you would lose the single person discount because there would be more than one person living in the house.

Same effect but for a different reason than you stated.

For example, my Mum does not get Pension Credit but she does get the 25% discount on CT because she is the only person living in her house.
Pollycat is online now
Reply With Quote Report Post
# 9
poppasmurf_bewdley
Old 17-09-2012, 9:48 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Aug 2007
Location: The beautiful county of Worcestershire
Posts: 3,367
Default

Quote:
Originally Posted by daysdream View Post
I'm in receipt of Pension Credit and a Basic State Pension, which combined comes to 572 every four weeks.
I rattle around in a four bedroom house and I want to rent a room out to help me financially, plus I'm lonely and enjoy the company of others in my home.
However, on looking into this, I find, no matter how I do the sums, I end up out of pocket if I rent a room.
I want to ask for 350p/m, which is a fair rent for the area I live in. I have contacted both my local Council, and Pension Credit office about how I stand regarding renting a room for 350p/m. Firstly I'm told that my Pension Credit would cease, and if my Pension Credit ceases, then my Council Tax single person allowance will no longer apply, meaning I'd have to pay full Council Tax (at present 138p/m).
This means if I have a lodger to stay I would need to pay full council tax = 138p/m, plus lose Pension Credit = 72p/m plus I'd need to restart buying a TV licence (I don't have a TV at present) = 12p/m, giving a total loss of 222 - this is without counting the loss of benefits having Pension Credit brings - eg: free dental treatment, etc.
This would leave me with c32 a week, from which I'd need to pay for the extra costs of electricity, gas, water another person living in the house would bring.
Am I doing something wrong here?
I'd like to offer a homeless person a safe roof over their head, but financially I'd end up worse off for doing so?
Can anyone else tell me, am I working this out wrong?
I find your logic difficult to understand.

If you rent out a room for 350pm, and estimate you'd be better off by ONLY 35 per week, where is the problem?

Yes, you'd have extra gas, electric and water for another person but that would be nowhere near 35pw. In addition, you'd stop being a drain on the resources of the country and the council by not claiming pension credit or council tax credit.

You'd also have, as you said above, the advantage of gaining some company and ending your loneliness, which could be priceless.
There are not enough superlatives in the English language to describe a Princess Coronation locomotive in full cry.
We shall never see their like again'
- O.S. Nock
poppasmurf_bewdley is online now
Reply With Quote Report Post
# 10
daysdream
Old 17-09-2012, 11:07 AM
MoneySaving Newbie
 
Join Date: Jul 2009
Posts: 8
Default

Lots of helpful advice to look into. Thank you, I'm off to start re-viewing the situation
daysdream is offline
Reply With Quote Report Post
# 11
BigAunty
Old 17-09-2012, 11:23 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2011
Posts: 6,751
Default

If you net an additional income of 350 per month, why are you surprised this leads to some benefit withdrawal? You get means tested benefits because you have low or no means so if you then come into means...

Also, you state that you don't want to downsize because you'd have to give some money to an ex - presumably they have an interest in the property and you don't want to meet your obligations by selling up, so don't expect me to feel sympathy for you rattling around in an expensive to run large house because you don't want to repay a debt to someone else.
BigAunty is offline
Reply With Quote Report Post
# 12
Pricivius
Old 17-09-2012, 1:50 PM
MoneySaving Stalwart
 
Join Date: Mar 2012
Posts: 428
Default

Quote:
Originally Posted by daysdream View Post
This means if I have a lodger to stay I would need to pay full council tax = 138p/m, plus lose Pension Credit = 72p/m plus I'd need to restart buying a TV licence (I don't have a TV at present) = 12p/m, giving a total loss of 222 - this is without counting the loss of benefits having Pension Credit brings - eg: free dental treatment, etc.
Sorry but this does not work out in my head...

If your CT would be 138p/m, then you are currently paying 75% of this which is 103.50p/m. Therefore, if you took in a lodger you would get 350 but lose 34.50 CT, 12 TV and 222 Pension Credit leaving you with 81.50.

Or have I missed something?
Pricivius is offline
Reply With Quote Report Post
# 13
sleepless saver
Old 17-09-2012, 3:02 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Sep 2004
Posts: 2,482
Default

Quote:
Originally Posted by Pricivius View Post
Sorry but this does not work out in my head...

If your CT would be 138p/m, then you are currently paying 75% of this which is 103.50p/m. Therefore, if you took in a lodger you would get 350 but lose 34.50 CT, 12 TV and 222 Pension Credit leaving you with 81.50.

Or have I missed something?
If the OP is getting guarantee pension credit, he gets full council tax exemption.
sleepless saver is offline
Reply With Quote Report Post
# 14
poor pensioner
Old 23-09-2013, 2:20 PM
MoneySaving Newbie
 
Join Date: Jul 2013
Location: north
Posts: 6
Default

Once again some highly critical people who have not got a clue about managing on benefits. The dubious 'benefit' of another person in your HOME comes at a price, your bills do go up, there is no incentive for a 'lodger' to economise and be miserly as a lot of pensioners are. OP does not even have TV. Wear and tear, and the essential maintenance costs are born by the owner, and 'tenants' can be very demanding for the pittance they are actually contributing.

And as for " you'd stop being a drain on the resources of the country and the council by not claiming pension credit or council tax credit."

I think you will find that there is a whole underclass of pensioners who have worked hard for low wages, and have not been able to "save' or afford a good private pension scheme during their working lives.

So now you would ,
"I used to be a Conservative, but I'm better now."!!!!!!!!

Be perfectly happy to subject any of our older generation to being forced into spending their 'golden years' with a bunch of freeloading strangers in their home if it saves a bit of 'tax-payers money'.

I have worked extensively with older people, including benefit advice work, and I think if you look up the stats there is still more unclaimed benefit than the vast amounts of tax dodged by the wealthier in society.

The "poverty trap" is alive and living in Britain. I understood that the 'rent a room scheme' was brought in to not only go some way to easing the shortage of lone person accommodation, but to provide affordable homes to some who were also unable to buy or rent elsewhere.

To offset this, and induce homeowners to co-operate, 4250 p.a. of rent in accomodation shared with a home owner was tax free, but no expenses were allowed against this. To claim expenses took a resident landlord out of the scheme.

I also seem to remember that at one time it did not affect income related or any other benefits. Now? I am not finding references that this is the case any more.

So those who are tax payers can gain 4250 a year tax free (less what it 'costs' them that cannot be claimed as an offset.

But if you are POOR and reliant on anything means tested you are stuffed for trying to get above the 'poverty level'.

Just how much is 4250 worth to eg pensioners? As stated, your lodger makes you liable for council tax, and your bills go up. That brings you down to a net gain of around half - if you don't incur other costs due to the tenant - how many of you critical tax payers would take a stranger in for what in most cases is less than 40 pounds a week, gross?

What a pensioner loses as already pointed out does not compensate for the hassle. The pittance of actual 'profit' is much less than the total value of lost benefit.

What would you advocate? Reducing benefits even further for pensioners? Take their homes from them- this is waiting if and when they become infirm and need residential care - or maybe just don't grow old!
poor pensioner is offline
Reply With Quote Report Post
# 15
nannytone
Old 23-09-2013, 5:25 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Apr 2010
Posts: 8,024
Default

the thread is over a year old!
i would assume the OP sorted their problem out a long time ago
nannytone is offline
Reply With Quote Report Post
# 16
poor pensioner
Old 23-09-2013, 7:13 PM
MoneySaving Newbie
 
Join Date: Jul 2013
Location: north
Posts: 6
Default

yes, for the original poster, but the principles remain the same for many others who will be trying to stretch tiny resources and not managing.

The attack ethos by some people on this site to those who are obviously less fortunate than themselves does need addressing. people post for help, and to get an outside perspective, not to be lambasted .

Forums should be for SHARING INFORMATION, not personal criticism that must put many people off asking for help.

I probably took particular offence as when I lived alone in a house too big for my needs was always asked the either / or question, move smaller OR take in lodgers.

The double edge sword with no middle ground. Why is there an assumption that smaller is cheaper? to maintain maybe, but not necessarily to buy! My large but crumbling 'castle' eventually was sold to a developer, at a time that was of my own choosing, but the trade 'down' was not less expensive.

And why bring irritations into your own long term home? Bad enough that you can hear all through your neighbouring walls without having no control over it inside your own home. (Just as well they are friends, not total strangers.)

But the neighbourhood where you have roots is not lightly abandoned to fit in with other people's ideas of how anyone else should lead their lives. People are not and should not be treated like cattle, to be moved on at the whim of a political philosophy to save a few miserable pounds for re-distribution to those who are wealthier but morally bankrupt.
poor pensioner is offline
Reply With Quote Report Post
# 17
nannytone
Old 23-09-2013, 7:20 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Apr 2010
Posts: 8,024
Default

you are really on the wrong thread.
there have been many benefit changes since this thread was finished and a lot of the information is out of date.
everyone that claims housing benefit and has a spare room is under attack, and on the whole, people agree with the reform. trying to argue against it on these forum is pointless
nannytone is offline
Reply With Quote Report Post
# 18
BigAunty
Old 23-09-2013, 9:16 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2011
Posts: 6,751
Default

Quote:
Originally Posted by poor pensioner View Post
y....

The attack ethos by some people on this site to those who are obviously less fortunate than themselves does need addressing. people post for help, and to get an outside perspective, not to be lambasted .

...
But do you feel sorry for the OPs 'ex' who he is reluctant to pay off when they downsize?

We don't know their economic circumstances (or if they are a joint owner, for example), only that their interest in the property is seen as a nuisance and the fear of having to pay towards their perceived share is one of the main factors why the OP continues to rattle round in a property too big for their needs.
BigAunty is offline
Reply With Quote Report Post
Reply

Bookmarks
 
 




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

 Forum Jump  

Contact Us - MoneySavingExpert.com - Archive - Privacy Statement - Top

Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

All times are GMT +1. The time now is 10:38 AM.

 Forum Jump  

Free MoneySaving Email

Top deals: Week of 22 October 2014

Get all this & more in MoneySavingExpert's weekly email full of guides, vouchers and Deals

GET THIS FREE WEEKLY EMAIL Full of deals, guides & it's spam free

Latest News & Blogs

Martin's Twitter Feed

profile

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.

TuneChecker Top Albums

  • ED SHEERANX (DELUXE EDITION)
  • SAM SMITHIN THE LONELY HOUR (DELUXE EDITION)
  • STATUS QUOAQUOSTIC (STRIPPED BARE)

MSE's Twitter Feed

profile
Always remember anyone can post on the MSE forums, so it can be very different from our opinion.
We use Skimlinks and other affiliated links in some of our boards, for some of our users.