Universal Credit

Sixer

drwho2011 wrote: »

A huge deficit with no or little growth hinders this and so QE is imposed to stimulate lending and therefore spending within the economy...

5% inflation year on year would inevitably lead to wage inflation and a much higher spending on welfare as a result, in a worst case scenario it could lead to hyperinflation.

I think this is where we disagree. I agree this is the standard view/purpose of QE, but the problem is that it's really being used to buy government debt (to keep the interest rate down, currently touted as a mark of government economic success, in a truly Orwellian irony) and to repair bank balance sheets (ie further bailouts) rather than to stimulate the economy. This is why I don't think wages will rise, or at least rise in any way that keeps pace with price inflation, and also why I think price inflation will persist. QE is not a growth tool as the BoE are currently pursuing it: it's a combined bailout and austerity tool.

drwho2011 wrote: »

Many would argue that this group does not need the support it currently receives if they had over £16,000 in savings.

Yes: that's what I said in my earlier post. I understand - and don't necessarily disagree - that we need to reduce dependency so the fewer "welfare" claimants, the better. However, it's dangerous (and unfair) to penalise the prudent one of two households on similar incomes. Not least because we may well dissuade the prudent from claiming UC to which they're entitled, but also because we encourage lack of prudence.

drwho2011 wrote: »

And yet it is likely that the personal threshold will continue to rise to £10,000 per year, putting more money in most peoples pockets.

Yes, but important to note when thinking of the future: this is not a Conservative policy; that five years of inflation will reduce the actual value of the £10k (at 4% inflation upping over 5 years it'd be about £8k anyway); that even £10k is too low when you consider NMW is more than £11k for a full-time worker; that inflation on unavoidables (energy and food) is higher than on luxuries. This is a nice headline measure, but is expensive as it's given to all basic rate taxpayers not just low income ones, and it's not actually worth as much as it sounds.

In my view, the government should concentrate on bringing down the cost of housing (not propping up unrealistic prices by providing indemnities for first-time buyers who can't really afford the loans they're taking out and similar stuff as they're doing now) rather than this attack on the welfare system which may well reduce dependency minimally but will also make life even more miserable for countless thousands of decent human beings.

drwho2011

Sixer wrote: »

In my view, the government should concentrate on bringing down the cost of housing (not propping up unrealistic prices by providing indemnities for first-time buyers who can't really afford the loans they're taking out and similar stuff as they're doing now) rather than this attack on the welfare system which may well reduce dependency minimally but will also make life even more miserable for countless thousands of decent human beings.

Its more complicated than that, indemnities for first-time buyers have very little effect on propping up prices at all. So long as you can make more than 6% on invested capital by renting out a property then its is a safe bet and that is the real cause for house price ceiling.

The only thing that would effect the ceiling that currently exists is by raising interest rates, but again this would not effect people looking to buy outright to rent or foreign investment looking for a safe haven.

There downsides however to rising rates would be immense and subsequent effects on the cost to the state mean that this is unlikely to occur unless there is substantial and consistent growth of GDP.

Personally speaking though I'd be happy with HPI and rising wages and don't think there's the slightest problem with housing costs but the problem lies in the culture of entitlement and subsequent dependency on the state.

drwho2011

Sixer wrote: »

Yes: that's what I said in my earlier post. I understand - and don't necessarily disagree - that we need to reduce dependency so the fewer "welfare" claimants, the better. However, it's dangerous (and unfair) to penalise the prudent one of two households on similar incomes. Not least because we may well dissuade the prudent from claiming UC to which they're entitled, but also because we encourage lack of prudence.

One way to achieve this would be to set the benefit cap at £12,000 per household. Then no one would be better off on benefits especially if all benefits (except the state pension) were time limited to Full NI Contribution years.

Sixer

drwho2011 wrote: »

Its more complicated than that, indemnities for first-time buyers have very little effect on propping up prices at all. So long as you can make more than 6% on invested capital by renting out a property then its is a safe bet and that is the real cause for house price ceiling.

The only thing that would effect the ceiling that currently exists is by raising interest rates, but again this would not effect people looking to buy outright to rent or foreign investment looking for a safe haven.

There downsides however to rising rates would be immense and subsequent effects on the cost to the state mean that this is unlikely to occur unless there is substantial and consistent growth of GDP.

Personally speaking though I'd be happy with HPI and rising wages and don't think there's the slightest problem with housing costs but the problem lies in the culture of entitlement and subsequent dependency on the state.

Well, indemnities are just one plank of many that ensure house prices stay high. Surely the biggest reason house prices haven't crashed further than they have during the biggest recession of recent times is the bank bailout (and low interest rates due to the bank bailout/QE)? Wage deflation, which, effectively, is what we've had for the last few years, needs to be accompanied by falling housing costs - or you WILL get greater welfare dependency.

I don't say there is no culture of dependency. Far from it. I don't say it doesn't need to be reversed. Far from it. But I do get entirely fed up with the general rationale that only the workless and working poor are responsible for their circumstances and should be the only ones responsible for paying the bill.

House prices need to come down.

We need to stop pretending that a 50% tax rate means a flight of capital and/or talented people - these people and their armies of advisers ensure their overall tax bill is probably more favourable than the poor sap on NMW.

Etc.

LunaLady

annewads wrote: »

Does anyone know about the changes to child tax credit. We are on quite a low income but have savings of over 20,000. I've heard that you will not be able to get the new universal credit if you have savings over 16,000. Does that include money in a childs account? Is it best to just spend the money rather than save it?

Why would you do that?

BigAunty

Deven wrote: »

Hello,

Users of this thread might like to try the Universal Credit Calculator at policyinpractice.co.uk.

Feedback and comments on the calculator and on Welfare and Universal Credit policy are welcome.

Hope it is helpful.

Deven.

yes, users on discussion time say their anti virus software wouldn't let them open the link because it said it was malware/virus/trojan.

Horseunderwater

That site is useless.

edgex

Deven wrote: »

Hello,

Users of this thread might like to try the Universal Credit Calculator at policyinpractice.co.uk.

Feedback and comments on the calculator and on Welfare and Universal Credit policy are welcome.

Hope it is helpful.

Deven.

http://forums.moneysavingexpert.com/showpost.php?p=53785831&postcount=7

http://whois.domaintools.com/policyinpractice.co.uk

Domain name:
policyinpractice.co.uk

Registrant:
Deven Ghelani

edgex

Deven wrote: »

Hello,

Users of this thread might like to try the Universal Credit Calculator at policyinpractice.co.uk.

Feedback and comments on the calculator and on Welfare and Universal Credit policy are welcome.

Hope it is helpful.

Deven.

have just reported this post, see DT thread for further info

http://forums.moneysavingexpert.com/showthread.php?t=4016459

lbahrani

zagfles wrote: »

It's just a credit line - if you have a credit card with a £5000 credit limit, or an overdraft facility, that's also "money readily available" - but just like the overpaid mortgage, they are available credit lines, not savings. You don't need to declare available credit lines to the DWP.

Hi Zag

With the UC roll out already started in some areas of the UK i thought it best to do some research and see where perhaps my wife and me may stand.

I refer to your post some time ago when the introduction of the UC was first disclosed.

I have a mortgage current account. It has an overdraft facility set against the value of my house. Last year, i came out of the negative facility into plus figures and have been able to allow this to grow a little and i can draw money out of the account. They pay 0.10% Interest.

Can i disregard this when i eventually change to the UC from the existing Tax Credit system when claiming for Child Tax Credit only as it is essentially a mortgage account/credit line?

If it is considered as savings can i repay a loan i have with my mum? can this also be disregarded?

Is there anything you could suggest to legitimately safeguard my savings and not declare them when claiming? Offshore?

Your thoughts and advice would be greatly appreciated. If you need more specifics i'll be happy to provide.

thanks