tax credits and savings

fiftynine

hello

i have just been made redundant. because i've worked 6 months of this year, along with my partner's yearly income i won't get any tax credits this year, but next april i should be able to apply from what i've been told, (our income will be well below £32000 and i have 2 kids at junior school).

however, as i knew i could lose my job at any point, i have been really careful with my money and saved some up - does anyone know how much savings i can have before it affects tax credits next april?

we can't live on my partner's wage and the money i get from my other part time job, (together 20,000) - we have quite a big mortgage, so i'm hoping i'll find another job - but there doesn't seem to be much around....

thanks

annie1975_2

Its only the Interest on any savings you have that will affect your tax credits.

princessdon

Depends on when Universal Credit is put in place.

Under this then £6,000 is the lower limit

merlin68

Wouldnt it make sense to pay the mortgage of with the savings before next april before universal credit comes in as with those savings you wouldn't get anything.

zagfles

merlin68 wrote: »

Wouldnt it make sense to pay the mortgage of with the savings before next april before universal credit comes in as with those savings you wouldn't get anything.

Yes, especially if you have a flexible mortgage where you can withdraw overpayments.

You might be best applying for tax credits now, even though you probably won't get any this year, you'll get a zero award but be in the system, so the switch to UC would likely be later.

fiftynine

thanks everyone for taking the time to reply - i don't really know what universal credit is - i hadn't heard of it before - but will look into it now - so thanks very much.

atlantis187

How can the tax credits people know how much saving u have if u have several different bank accounts?

princessdon

atlantis187 wrote: »

How can the tax credits people know how much saving u have if u have several different bank accounts?

Because all your savings are taxed at source and reported to them.

Ie if you are a none tax payer you normally declare that to the banks as otherwise you pay 20% (eg like I do for my children as they don't earn enough to pay tax).

DWP are made aware of accounts and interest paid on them.

atlantis187

princessdon wrote: »

Because all your savings are taxed at source and reported to them.

Ie if you are a none tax payer you normally declare that to the banks as otherwise you pay 20% (eg like I do for my children as they don't earn enough to pay tax).

DWP are made aware of accounts and interest paid on them.

How does this work with offsett accounts then that are linked to your mortgage, where no interest is paid?

princessdon

atlantis187 wrote: »

How does this work with offsett accounts then that are linked to your mortgage, where no interest is paid?

That is different, hence why advice on here is to do just that.

atlantis187

princessdon wrote: »

That is different, hence why advice on here is to do just that.

So for example if one had the following accounts:
saving account linked to mortgage with £20k in it
and offsett mortgage with £100k outstanding

Will the £20k be okay being left in the savings account as its not actually gaining any interest for Universal Credit sake or is it best to actually move to money into the mortgage account?