Who is the safest in a recession - Home Owner or Renter?

Dithering_Dad

justsayyes wrote: »

A single person in central London can get in excess of £1200 a month Housing Benefit.

Crikey! Then again, with the rent I'm paying on my studio flat, I can well believe it. :eek:

Gorgeous_George

DD

You have too much time on your hands.

GG

WTF?_2

justsayyes wrote: »

Isn't the whole point of Job Seekers Allowance etc a safety net for people who lose their jobs or are unable to secure employment? If someone is actively seeking work but cannot find any, why on earth should they feel ashamed of using benefits?

No-one said anything about being ashamed to claim benefits. I just feel a lot better knowing that I can survive off of interest on my savings and not be dependent on social security payments.

I'm certainly not going to avoid being financially sensible and saving money every month just because it will affect what handouts I'll get from the state should I find myself unemployed. Benefits are a safety net, they shouldn't be a lifestyle choice. Given the chance I prefer not to have to rely on what the government might throw my way.

Dan:_4

!!!!!!? wrote: »

No-one said anything about being ashamed to claim benefits. I just feel a lot better knowing that I can survive off of interest on my savings and not be dependent on social security payments.

I'm certainly not going to avoid being financially sensible and saving money every month just because it will affect what handouts I'll get from the state should I find myself unemployed. Benefits are a safety net, they shouldn't be a lifestyle choice. Given the chance I prefer not to have to rely on what the government might throw my way.

I would still claim, even if I had savings - after all it's your tax money.

Max_Headroom_3

I think this is a very interesting post, good one DD.

The whole question of fairness of benefits is an interesting one. Basically benefits are fundamentally unfair, but unfortunately there simply isn't enough money in the pot to make them fair. That's not to say that there aren't many ways that they could potentially be improved.

I would have no hesitation or qualms in claiming benefit if made unemployed, but I doubt I'd get much as a single bloke with low outgoings.

Bottom line, yes if you're financially imprudent you're going to do "better" out of benefits. And if you've saved a big chunk of "house" in cash, you're going to lose a lot of it as it will undoubtedly preclude you from benefits. But it's hard to know how to resolve that without an awful lot more cash being needed to be injected into the system, and where's that going to come from? I guess it will always be unfair to someone, and sadly the better you've done for yourself and the more prudent you are, the more unfair the system is likely to be.

Thought provoking post though.

WTF?_2

Dan: wrote: »

I would still claim, even if I had savings - after all it's your tax money.

I would certainly claim anything I could - but the government policy seems to be that if you have made good financial provisions for yourself you get nothing, or at least very little.

They seem to be fostering a culture of dependency with that sort of policy. Anyone not particularly well off and getting some benefits on account of low income has little incentive to try to improve their lot by working harder or getting a better job.

Though personally I'm more worried about what state the benefits system will be in a few years down the line. I reckon it's pretty unsustainable and decent handouts simply won't be available in which case you'll have to have provided for yourself.

justpurchased

!!!!!!? wrote: »

I would certainly claim anything I could - but the government policy seems to be that if you have made good financial provisions for yourself you get nothing, or at least very little.

They seem to be fostering a culture of dependency with that sort of policy. Anyone not particularly well off and getting some benefits on account of low income has little incentive to try to improve their lot by working harder or getting a better job.

Though personally I'm more worried about what state the benefits system will be in a few years down the line. I reckon it's pretty unsustainable and decent handouts simply won't be available in which case you'll have to have provided for yourself.

I think this as always been the case. I think part of our economy relies on risk takers to be the next entrepreneurs.
It is just that too many people have been allowed to take such a risk (100% and 125% Mortgages)
The non risk takers are neither rewarded nor trouble with debt either.

Jonbvn

Max_Headroom wrote: »

The whole question of fairness of benefits is an interesting one. Basically benefits are fundamentally unfair, but unfortunately there simply isn't enough money in the pot to make them fair. That's not to say that there aren't many ways that they could potentially be improved.

It is interesting that when the subject of benefits and tax-credits arise in this forum (savings forum as well), tempers seem to flare. I remember another topic (raised by DD I think) where people were considering claiming WTC's and also making very large pension contributions through their own company. Lots of posters were screaming that it was immoral.

Personally, I would have no qualms about making a WTC or benefit claim which was legal. However, it would likely be a last chance motel decision.

Guy_Montag

Interesting discussion - the example given, in my mind, favours the home-owner.

There could be other examples which favour the renter - as !!!!!!? suggested - the homeowner could have mortgaged up to the eyeballs on IO & have no equity, in which case the renter is in a better position.

Alternatively if neither the HO nor the renter have dependents then the renter can move to an area (possibly abroad) less affected.

I know that if I lose my job, currently, I'm stuffed for benefits so I have worked out some options:

1) I live frugally anyway, so can I find another job in the area, (even one paying less) quickly.
2) If that's not possible can I move somewhere where work may be available - either in the UK or check immigration options for English speaking nations & work out where in the EEA I can go. (For example Nokia, despite being Finnish, conducts most of its business in English).
3) What benefits can I get? Should I buy a house just so I can claim. Is that possible?
4) Go live somewhere cheap with easy entry requirements: Sri Lanka, Thailand, Spain, until it all blows over.

dopester

Dithering_Dad wrote: »

If you really would feel better living off your savings, while others lived off benefits, would you feel increasingly happy as time went by and your savings dwindled down to nothing?

My own projection is the government will have no choice but to reduce the range and size of many types of income support and unemployment benefits. Can't see how they will be able to afford their current spending formula. More so with looming deflation.

Wouldn't surprise me if they resorted to issuing holograph embossed food vouchers as a main part of unemployment payment - acceptable at Aldi and Lidl stores.