Pension credit refusal

katycanary

I was awarded pension credit a few weeks back, it has been stopped now.
It is because the pension credit people are treating a mortgage that we have which is an offset mortgage, as savings. We maintain that it is borrowings and not savings, but they reckon because we could draw on it it is treated as savings. We have to pay interest on any money we draw from the offset account so it is still a mortgage. Any views on this please?:(:(:(

karenx

If it is money you have acess to then I think it will be included. Just like kids savings accounts if the person is also named on it it counts as savings.

katycanary

Karenx

My son is a financial adviser, and he explained to me that our mortgage is not like tradional savings, i.e.. kids savings accounts.
If we had an overdraft or a 10k credit card, that would not be taken into account with the pension credit people because it is not recognised as cash already received. Just like the offset mortgage.
Katycanary

fluffymovie

But a financial advisor isn't the person making the decision on your application!!

The pension credit regulations will explain what capital is used and how.

If you disagree with their decision. Best to speak to them rather than seek advice from a family member IMO

sleepless_saver

It will depend on the exact nature of the offset. Something like the One Account should be OK as it's all in the one pot.

But otherwise if the mortgage is not secured against the savings, they would normally take the value of your savings into account.

I think the only exception to this would be if you could demonstrate that you opened an offsetting ISA at exactly the same time as you took out the mortgage.

katycanary

The mortgage was taken out as an offset mortgage, with money put in the offset at the start.
I do not consider the money in the offset account as savings as it is part of the mortgage which we will have to pay for if we use it. It is just a borrowing tool to use based on the value in the house.
It is the same as if we had an overdraft, we could use it but it would cost us to do that, so this would not be recognised as a cash benefit.
Thanks for your comments it is much appreciated.

roy62

Good scam if you could get away with it.

Macro_3

You can't offset savings against debt for benefits purposes. If you had an overdraft of £1500 owing to your bank, for example, and another account in which you had £10000, your savings for benefits purposes would still be £10000 - you couldn't claim that the savings net total was actually £8500 unless you paid the debt off - and only then if it were considered reasonable to do so.

over_flo

I agree with you Katy.
This seems completely unfair.
We are making over payments to our mortgage - we want to pay it off as soon as we can.
I don't regard the overpayment as savings even though we can draw on it at any time if we need to.
The situation you describe is surely very similar and if you are retired I would understand that you want to pay off the mortgage as soon as possible too.
It's not savings - it's reducing the debt.
I though that was what made these flexible mortgages attractive - it's hardly a scam!

I think that's a decision worth appealing.

katycanary

We are appealing against the decision, we believe that the benefits office has used the difference between the offset and the mortgage as the mortgage which is not correct it should be the two together as the total borrowed. Hopefully they will see what we are trying to explain to them and that will help to retrieve the benefit.

sleepless_saver

I'm afraid the benefits staff will be going by the rules set out in the decision makers guide, rather than how you see it. But good luck, and let us know how you get on.