Why no more than £16000 in savings?

reck_uk

I’ve seen this mentioned a few times on this forum, you should never have more than £16000 in your savings account. What’s the reasoning for this?

Is it something to do with the benefits you would receive if you became unemployed? If so surely the benefit is tied to how much you have in savings, so it wouldn’t just be <£16000 you get full benefit >£16000 you get none. If its tied to how much you have in savings surely there wouldn’t be hardly any difference between say someone who had £15000 and someone who £16000 in savings.

Onawingandaprayer

AFAIK it just stops you getting income support

nzseries1

reck_uk wrote: »

If so surely the benefit is tied to how much you have in savings, so it wouldn’t just be <£16000 you get full benefit >£16000 you get none. If its tied to how much you have in savings surely there wouldn’t be hardly any difference between say someone who had £15000 and someone who £16000 in savings.

It could be! Stamp duty works like that!

<£125,000, no duty to pay.
>£125,000, 1% duty to pay on the entire amount.

Who's to say that benefits aren't any different? reck_uk, please don't think for a second that our government like to do things logically

reck_uk

It would be interesting to know for sure though what the consequences are.

I mean what happens if I go from £15,999 to £16,001 in savings. How much would this affect me and what circumstances? The amount of times I see the warning about not having more than £16000 in savings I get the impression the impact is more than just a few quid less in income support.

glider3560

reck_uk wrote: »

I mean what happens if I go from £15,999 to £16,001 in savings. How much would this affect me and what circumstances? The amount of times I see the warning about not having more than £16000 in savings I get the impression the impact is more than just a few quid less in income support.

I've never seen this warning, so I assume it is in forums that I don't visit (i.e. the benefits board). I can only assume you would lose some/all of a particular benefit it you had over £16,000 in savings.

Perhaps if you post a list of which benefits you receive, someone can clarify whether these are affected by savings.

ses6jwg

Why should you get benefits when you have the equivlant of some people's annual salaries sat in your bank, to be fair?

reck_uk

Well I don’t get any benefits but I also don’t have £16000 in savings either. I just wanted to understand the advice given out on these boards saying you shouldn’t have savings over 16k.

So in my case I have a job with some savings, less than 16k, in the bank and I don’t receive any benefit. Let’s say in years to come I’m in the fortunate situation where I’m able to save regularly and I end up with 16k in the bank. Why does my situation become worse once my savings go over £15,999? Or is just a problem if I was to lose my job and try and claim some kind of benefit? If so how much different does it make for instance having 16k in the bank over 15k?

Onawingandaprayer

Personally with respect, in the great scheme of things, I'd have thought there were far more things to worry about than not getting income support if you've over £16k in savings.

Mini_Bear

Very little difference. It is unfortunately our Govts fault, as others have said look at the way stamp duty is put on home values. The Govt think that anyone with 16k savings should use this to fund their lifestyle rather than benefits. Its a tough one and you could argue that someone who has splurged every penny they earn is better off if they were made redundant say, than someone who has saved sensibly with regards to claiming benefits.
I took the 16k advise on the forum to mean just be wary of having pots of cash in "savings" if you still have a mortgage and underfunded pension. Better to pay into these assets and reduce your cash. Which is sensible anyway with the level of interest currently available for saving.

reck_uk

So it’s not just me then who doesn’t know the answer to this then.

Onawingandaprayer do you know that’s the reason for the advice? If it didn’t matter why would people advice against it?

I just want to understand what the implications are and then I can make my own decisions on whether it’s important or not.

I think the best thing for me to do is search for some threads where people have advised against this and email the person direct.

paulw98

ses6jwg wrote: »

Why should you get benefits when you have the equivlant of some people's annual salaries sat in your bank, to be fair?

Why should people who dont have the sense to save for a rainy day get benifits when those who are carefull with their money get peanalised. Just another example of success being peanalised and failiure being rewarded