how to get rid of your savings so you can get council tax benifits

rpc

jocan wrote: »

Just seems pointless working all your life to have savings and then having to spend it on your household bills and food because her pention only covers the rent.

That's the way it should be - work for X years to ensure you have enough money to retire on. When the money runs out, the state will pick up the bill but she will then be very limited in what she has.

The ones who spend it all and then depend on the state to bail them out are the ones doing it wrong, but sadly this is permitted. Of course, state benefits are a lot less than some people's pensions/savings so it isn't necessarily sensible.

And before someone tries to read between the lines - those who struggle through life financially and can't save don't fall into the "doing it wrong" category.

atush

jocan wrote: »

Just seems pointless working all your life to have savings and then having to spend it on your household bills and food because her pention only covers the rent.

If she did work all her life, she didn't save- you said the money was from the sale of her house. If her state pension does not cover living expenses, then she should have had an personal or a work pension which combined with state pensions would cover her living expenses.

So, help her invest her lump sum to provide an income from it to suppliment her pension. That is what savings are for- to provide you an income.

At least, make sure she is getting 3% instant access, maybe put some on longer into fixed rates. And if over 85K she splits it into different banks.

Nine_Lives

All i can say is be thankful you never asked this in the tax forum!!!!

You wouldn't even have made it to the red X in the top corner before you would've been slaughtered. Seems the members who post in this forum are a lot more forgiving.

margaretclare

jocan wrote: »

Just seems pointless working all your life to have savings and then having to spend it on your household bills and food because her pension only covers the rent.

Well, she chose to do this - move into a rented flat! I know several people who've done similar. House maintenance can be difficult and expensive if you can no longer DIY, so it can be a sensible thing to do. Especially if the house is too big and you're rattling around in it like a pea in a drum.

I am sick to death of this argument 'we've worked all our lives'. We were fortunate to be able to work - not like many of the young folks nowadays who seem to have no chance of any kind of a job.

My OH and I have both worked all our lives, nearly a century between us and we're still taxpayers. We do spend money on household bills and food! What do you suggest? That someone works all their life and then gets all household bills and food paid for? Come on! What planet are you on?

bobthedambuilder

jocan wrote: »

She now lives in a council flat and pays full rent because she has savings of over £16000 the chap next door only pays£16.00 a week because he has savings less than £16000

I know who I'd rather be.

aliasojo

jocan wrote: »

Just seems pointless working all your life to have savings and then having to spend it on your household bills and food because her pention only covers the rent.

The whole point of savings is to have a buffer when you need it. She needs it now, so has to use it.

It would be wrong to keep your savings whilst taking money (in the form of benefits) off other people.

Sorry, I realise this probably isn't what you wanted to hear, but the days of being able to keep nest eggs intact and possibly even being able to pass on an inheritance are largely all gone now.

Once she uses her own money for her own living needs and her savings drop to below the cut off point, she will then be able to get help like the man next door.

iltisman

Does this deprivation of assets last forever. If you went on holiday to Vegas, got carried away and lost the lot does that disbar you from benefits for life.

SnowMan

jocan wrote: »

She does now use the money for her living expenses as her pention does not cover all of her bills .

How old is your mother-in-law by the way?

When she reaches State Pension Age then the 16K limit won't automatically apply because the pension credit rules kick in.

Allowance will be made for her savings which will probably mean if we are talking a significant amount from the house sale she still won't qualify for help through benefits such as pension credit. But having over 16K in savings doesn't automatically stop you getting pension credit.

But can't say absolutely without knowing more info.

atush

No, but it would be she, not the OP who would have to travel and gamble. She can spend her money, but not give it away. She may well live and long life and need that savings to live one- better she has it than not.

There is a 10.7 mil lottery winner on benefits as we speak, and he gets them as he spent the lot (and is a convicted criminal to boot). Love to see a law that said any person convicted of a crime who wins the lottery should have to pay a windfall to victims/the state.

margaretclare

iltisman wrote: »

Does this deprivation of assets last forever. If you went on holiday to Vegas, got carried away and lost the lot does that disbar you from benefits for life.

I think that's a bit different. Going to Vegas, betting on a three-legged horse, those kind of things, are not deliberately getting rid of your savings in order to claim a benefit. Losing money in a casino or on the race-track are not the same as giving money to relatives - you place bets hoping to win, don't you, you don't deliberately chuck your money away.

I'm this sort of age-group and I'm still building up my savings/investments. Am fascinated and amazed by the process and wonder where my savings will go to in 10 years' time? I'd like to be around a lot longer just to see it.