Need urgent WTC advice

hope4debtfree

hello,

I have an urgent question guys. I've got a job about 6 months ago and i was entitled to Working Tax Credits as my salary is less than £15k. Since then i have been saving £5000 in my current account to pay a lump sum towards my mortgage.

But I was chatting to a friend who has now told me that i can't have these savings over £300 as i have to declare these to WTC? :eek:

I thought the figure would have been £6000 or more before it affects your WTC?

The reason i ask is that whilst on benefits, we were allowed to save upto £5500, but how is it that those who work aren't allowed to have some form of savings? That sounds so unfair :mad:

Could someone please clarify this ASAP as i'm so confused :huh:

Thanks

sleepless_saver

Don't panic, your friend is completely wrong. They will take the interest from your savings into account, but they will ignore the first £300 of interest.

There is no upper limit to your savings for working tax credit. See pdf link for full info.

hope4debtfree

Thanks for your quick reply sleepless. Forgive me, but the pdf is not very clear. It say "capital" is treated as income, so therefore would i be right in thinking that would mean £15k + £5k = £20k income? When am i supposed to declare that i have X amount of money in my account?

Also what about this:-

http://menmedia.co.uk/accringtonobserver/news/s/349002_benefit_fraud_mum_failed_to_declare_savings

EDIT: I HAVE JUST BEEN THINKING! :- These so-called savings have been built-up from from the salary, wtc, carer's etc - all these have already been mentioned to the WTC, so surely they can't add it twice, can they? All we have done is cut back on the spending and have managed to save more - incoming income is still the same as declared!

sleepless_saver

It doesn't say capital is treated as income (except in very exceptional circumstances mentioned at the top of page 22 which don't apply to you). See page 21 - which explains how they take income from savings into account (i.e. not the savings themselves which are capital, but the interest you get on the savings after the first £300 of interest).

So if you earn £15000 and get £600 annual interest from your savings, then your income for tax credit purposes is £15300.

Interest from ISA savings is ignored completely by the way.

hope4debtfree

Couple of questions:

1. How come the news story says the mother got done for not declaring her savings

2. How much savings would I need to have to make £300 interest

3. If my capital/savings have been built from already declared income, then surely they are not extra savings?

Cornish_piskie

The article that you have linked to is nearly 10 years old!

The information that sleepless saver has given you is entirely correct

The amount of interest you might receive on your savings is entirely dependent on the interest rate of the account you have it in. You can use the savings calculator on here to try to work it out but as the tax year has just ended, you will be receiving statements of interest from your bank.

raven83

Your friend in completely wrong! She is obviously getting Benefits i.e IS confused with tax credits.

Icequeen99

The newspaper article you refer to is about Working Families Tax Credits, savings were relevant for that benefit. But it was replaced by the current tax credits system.

It is the interest from savings for WTC and CTC you need to declare as others have stated.

For DWP benefits, it is the actual savings that matter and then the DWP assume an income from them (£1 for every £250 above a certain limit). For some DWP benefits there is an upper limit of £16,000.

Your friend is definitely confused.


IQ

hope4debtfree

Thank you very much for clarifying guys. As you can understand the tax credits system is very complicated and difficult.

But a £300 interest would mean approx £20k savings