OFFSET and Tax Credits/Benefits

magicdogsbrain

OK - so if you are made redundant with an offset (current account) mortgage, the offset already has 20k in it and the redundancy is similar.

Wife only works part time (3 days) - so family income will be down to about 17k.

Do we have a problem with applying for tax credits, coucil tax benefits etc? I completed that benefits checker ( specifying that my offset was savings - although it is actually just a loan facility if you think about it) - all it said was I should be able to get council tax benefit!!

Would I be better using my capital to part pay off the mortgage, then applying for benefits? I have no idea what I am doing because I am 40 and never applied for a benefit in my life.

Also, would you tell credit card companies, mortgage etc about your redundancy - or is it better to keep them in the dark?

Any comments/ideas would be appreciated - I just want to do what everyone else does!

magicdogsbrain

Can anyone help on this?

magicdogsbrain

Anyone like to comment?

gravitytolls

Try posting in the benefits forum, they're likely to be far more knowledgable.

In the meantime, I don't really get th eoffset thing, but if you will be claiming any benefits, they do require you to declare savings, and benefits are reduced accordingly over £3000 or £6000 depending on the benefit. You are also expected to declare any savings beyond these figures in childrens names.

Seems to me you're likely to be better off by paying a lump off your mortgage, but CAB would be best able to help you make that decision, you could perhaps even find this on their website, I think you can also email them.

Re. credit cards, you've no need to tell them unless you're going to struggle to make repayments. In either scenario, they won't care about your redundancy, but they will care about reduced payments. If you are going to have difficulties, the sooner you contact the better, if they're difficult, CAB are marvellous and creditors tend to be more willing to play ball when they realise you've taken professional advice.

Don't forget to make sure you claim on any insurances you have.

MrsBartolozzi

I'm no expert, but I would seek advice before paying any money off your mortgage as it could be seen as deprivation of capital as far as benefits are concerned and they would work out any entitlement as though you still had the savings, and then you might actually need them to pay the bills.