What is classed as savings? (time limit)

andrew71

This may seem a daft question to ask but what is classed as savings in an account?
What I mean is there a time limit money as to be in account to be classed as savings? Say for instance somebody recieved a bonus or was given (I wish) a large sum of money and they paid off their credit card/loan with that money. If the money was only in the account for about three days would that still be classed as savings, despite the time it was in?

atush

It depends, are you asking as regards means tested benefits and deprivation of assets?

I personally would pay off debt if I received a sum suh as you describe, but i have never been on benefits and some say paying off debt isn't allowed (and I say surely the debts you hold can be taken into acct with any savings to give you a net savings figure apart from mtg).

HappyMJ

andrew71 wrote: »

This may seem a daft question to ask but what is classed as savings in an account?
What I mean is there a time limit money as to be in account to be classed as savings? Say for instance somebody recieved a bonus or was given (I wish) a large sum of money and they paid off their credit card/loan with that money. If the money was only in the account for about three days would that still be classed as savings, despite the time it was in?

As above with regards to means tested benefits...

Excluding benefits the savings count when you are next paid. Whatever is left in all of your current accounts and savings accounts are considered savings.

If you are given a bonus then that indicates to me you are employed so may not be claiming benefits so that's how I would count it.

evenasus

This is why the OP is asking.

andrew71 wrote: »

For the past seven years we have had a monthly payment going into our account to cover our mortgage from the mortgage insurance we took out with it. This was because I was diagnosed with ME/Fibromyalgia.
The amount the insurance pays in doesn't pay the full amount but it does help towards the monthly mortage payment.
This morning we recieved a letter to say that the inusrance company would like to pay us a large one off lump sum which would then mean they would then stop paying any more monthly payments.
Our mortage is about £70K and they are offerinng just over half that amount.
If we took the lump sum we would then pay part of the mortage meaning our payments would drop considerably lower per month.

The problem we have (yes there is some) is that I claim ESA and DLA. I know DLA is not means tested but with ESA or JSA would this lump sum be classed as an income even if it went straight from our account to pay the mortgage off? Also would WTC and Child tax credit be penalised because of this?
I know that if we decided not to take the lump sum they would still pay the monthy figure but the lump sum does seem the better option.

Having spoken to a few people they have said that the benefits people could turn around to us and say that do we have proof we were going to use it for the mortgage (we would and I am sure we could get a letter from our mortgage provider to prove this). Somebody even suggested getting them to put the cheque in their name and they would pay our mortgage off with it (some how I don't really think that is a good idea)
Another person said that we should not accept the offer show prove it wouldn't help us out and try to see about increasing it, although I'd rather wait until we wouldn't be penalised before going down that route.
It was also pointed out that technically it isn't an income as such because we took the insurance on the mortgage for a situation like this arising.

Then another part of me is thinking if we do take the offer and 12 month later I am fit (or have to go back) to work would they demand the money back?

I did post this question in the mortgage section but its now dissapeared down the section and rather than bump it to the top I thought it would be more sensible to post it in this section.

lisyloo

and I say surely the debts you hold can be taken into acct with any savings to give you a net savings figure apart from mtg

That would make sense but it's NOT how it works.
Debts are not taken into account only savings.
You can plan for this in advance as part of sensible financial planning, but trying to hide money at the last minute to get benefits usually falls under "deliberate deprivation".

atush

Does he have to take the offer? Will he be better off declining? I am not sure he actually has to take this offer but someone needs to help him figure out if he should or not. CAB?

If it was mtg protection ins, and they pay the mtg with it I can't see it not passing the DOA test?

opinions4u

What would happen if you reject their offer of a £35k lump sum?

How much are they paying you and how much longer do you expect them to pay for?

Is there any wriggle room for them to stop paying you?

lisyloo

Andrew - I don't believe there is any time limit.
I think you need to get advice on this.
Why not ask the benefits people for advice?
I presume you have nothing to hide and don't want to do anything illegal so why not ask them. The vast majority of employees want to help to get the maximum legally, not to grab anything they can (and yes I've had dealings with Inland Reveune and benefits people who both times have helped to get the maximum legally).

You need to get proper advice on this and also whether it's better to take the lump sum rather than the monthly figures.
The idea of getting better and keeping the lump sum is attractive, but there is also a worse case scenario of you having this condition for a very long time.
A lump sum may seem attractive but may not be the best deal for you.

I don't know the answer to your question I'm afraid but I think you need proper advice.