Should I reduce One Account Facility?

minimoocow

Hi guys,

What title says really - want some opinions . . .

We currently have quite a bit in spare funds in our One Account (have reduced slightly since start of the MFiT challenge but nearly all of the funds paid off could be withdrawn again). Now I don't have a problem with having the facility there and don't get tempted to use it but I have been wondering whether we should reduce this and if so how much to leave "just in case"

My thoughts are:

Reducing it gives us less of a risk of ID fraud etc but would it be seen as a deprevation of capital if one of us became unemployed? (I think it would be seen as savings rather than less debt so we'd be expected to live of this first?) Neither has been notified of redundancy (although there have been some at work but not affecting me) but don't think any job is immune at the minute so wouldn't want to reduce balance only to find we couldn't claim Job Seekers if we needed to but also couldn't borrow the funds back!

I know if I reduced it and then wanted to increase it again they would need to run further credit checks . . . but have no plans requiring borrowing so don't think this is an issue.

So what are people's views? Leave as is or reduce? Is there anything else to consider I haven't thought of?

Thanks!

ailuro2

We have just done a similar thing - our mortgage is, in real terms, almost paid off,(see sig) but the recent interest rate cut means we now pay just 4.99% on our tracker mortgage, so we decided now was the time to take the money out of the overpayment fund and put it into higher interest savings accounts.
By doing this we'll make an additional £200 next year if interest rates stay the same, but with them being widely rumoured to drop again we should gain even more.

I have no idea what is taken into account when claiming jobseeker's allowance, but I doubt you can 'hide' savings from the government when it comes to claimin and benefits. Would your mortgage payments be covered under by insurance if you were made redundant?

If you think your coat is on the proverbial 'shaky nail' at work, then think now about doing some night classes to give you extra skills should you need them on your CV...your present employer might even pay for them, if they are part of the 'investors in people' scheme.

carrottopsuk

Hi, it may be best to post on the benefits board for info on deprivation of capital in your situation.

Here's a link to a thread on deprivation of capital that you may find interesting.

http://forums.moneysavingexpert.com/showthread.html?t=1049931

wymondham

I have been thinking the same, but decided to leave the facility as it is guarenteed cheap funds instantly available - something I could well need in these turbulent times! This type of scenario is one of the major benefits of a current account mortgage, as it could be hard getting hold of cash etc if I just got made redundant.

minimoocow

Thanks for the responses . . .

I think for the moment our jobs are ok but you never know! I certainly don't want to hide any savings etc my thoughts were just in current situation we'd be expected to spend most of the facility before we were entitled to benefits which would last us a while. If we were to pay off some of the facility we wouldn't have any savings so would normally be entitled to benefits (and could manage for a bit as we'd have no mortgage).

I just don't want to be in a situation where they say - you're not getting anything as you shouldn't have paid that off as then we'd be screwed as we'd have no savings but get no benefits! I'm not trying to play the system as all being well we still have jobs etc and I was going to reduce limit this month but then with redundancies annouced at work (but not for me) it got me thinking!

I might post on the benefits board also and see if there is a definitive answer . . . thanks all!

MMC