best place for savings if I become unemployed

goldenfeathers

I currently pay regular money into my mortgage offset account, a tracker at bank base rate plus 0.85%. Even as a higher rate tax payer I would probably be better off putting this money into a higher paying savings account. However my job is really insecure at the moment and I never know from one month to the next if I am going to remain in employment. I maximise my cash ISA savings and already exceed the permitted allowance if I were to claim benefits. If I put the money from my mortgage account into a savings account and then become unemployed is there anything stopping me transferring my savings into my mortgage account so that my benefits are not affected?

ses6jwg

The law, I believe.

scottishblondie

Yes, you would be depriving yourself of that money in order to claim benefits. It's fraud.

patman99

It might be worth your while looking in to getting PPI if you don't already have it.
When I changed mortgage providers, I set-up a £15 a month policy that pays-out £350 a month if I loose my job. Last year I got made redundant and the policy saved me from going under. Not only did it cover my mortgage but my loan as well.

If you become unemployed and your savings are above the threshold, you will still get Contribution-base JSA for 6 months.

If you really are unsure about your future job prospects, have you thought about paying lump sums off your mortgage?. It doesn't need to be huge amounts, just enough to keep you permanently under the DWP's £16k savings threshold.

opinions4u

scottishblondie wrote: »

Yes, you would be depriving yourself of that money in order to claim benefits. It's fraud.

If it reduces the debt, in what way is there deprivation of assets? The net worth of the individual involved remains unchanged.

e.g. £300k house, £200k mortgage, £50k in savings. Net assets £150k.

Use the savings to repay mortgage debt = £00k house, £150k mortgage, nil savings and the net assets remain at £150k.

If I put the money from my mortgage account into a savings account and then become unemployed is there anything stopping me transferring my savings into my mortgage account so that my benefits are not affected?

If the funds are actually repaid to the mortgage, then I think it's fine.

If the funds are sat in an offset savings account linked to the mortgage, then I think they'd be treated as savings for benefit purposes.

noh

opinions4u wrote: »

If it reduces the debt, in what way is there deprivation of assets? The net worth of the individual involved remains unchanged.

e.g. £300k house, £200k mortgage, £50k in savings. Net assets £150k.

Use the savings to repay mortgage debt = £00k house, £150k mortgage, nil savings and the net assets remain at £150k.

If the funds are actually repaid to the mortgage, then I think it's fine.

If the funds are sat in an offset savings account linked to the mortgage, then I think they'd be treated as savings for benefit purposes.

I believe it is deprivation of capital that is the problem.
Capital is defined, by the DWP, as all assets that have a monetary value not including the home you live in. See W1.72 of document linked to below.
If the benefit claimant has taken a deliberate action in order to increase their potential benefit payments then that could be ruled as deliberate deprivation of capital.

Paying off loans or paying money towards a mortgage by choice can be seen as an indication of deliberate deprivation of capital.
See W1.730 of
http://www.dwp.gov.uk/docs/hbgm-bw1-assessment-of-capital.pdf

also previous thread here
https://forums.moneysavingexpert.com/discussion/2816624

opinions4u

noh wrote: »

Paying off loans or paying money towards a mortgage by choice can be seen as an indication of deliberate deprivation of capital.
See W1.730 of
http://www.dwp.gov.uk/docs/hbgm-bw1-assessment-of-capital.pdf

also previous thread here
https://forums.moneysavingexpert.com/discussion/2816624

That's appreciated. It's certainly changed at some point in the last few years.

(I hate being wrong!)

le_loup

opinions4u wrote: »

(I hate being wrong!)

Live with it. You rarely are.

Doshwaster

scottishblondie wrote: »

Yes, you would be depriving yourself of that money in order to claim benefits. It's fraud.

Besides, I would be far happier living on savings than on benefits, That's what savings are for.