Are we allowed to save?

kirstle99

My husband and I are looking to buy a house in the next 3 years. Currently we get Tax Credits (Childcare) for 1 of our 2 children, and we get child benefit aswell.

I read somewhere a while ago that savings can affect benefits. So does this mean we can pretty much never save a good sized deposit up for the purpose of buying a house?

Our joint income is around £28k / year if it matters. Hubby works 40hrs a week I work 33hrs/week.

zagfles

Tax credits aren't affected by savings at all (except you need to declare taxable interest over £300, but it won't make much difference to your claim).

The new Universal Credit coming in will look at savings, but there are transitional rules which will protect people with savings claiming tax credits.

banner188

zagfles wrote: »

Tax credits aren't affected by savings at all (except you need to declare taxable interest over £300, but it won't make much difference to your claim).

The new Universal Credit coming in will look at savings, but there are transitional rules which will protect people with savings claiming tax credits.

But after UC is implemented fully, people will be penalised if they try to save for a house.
Also, low earners will be significantly worse off under UC as well as out of work claimants which is the whole point of UC.

I would advise anyone to quickly save for a mortgage before the rug is pulled from under you.

kirstle99

Oh this is disheartening to hear, we won't be in a position to buy a house due to credit score for at least 3 years. We were going to use that time to try and save up a deposit.

Gutted doesn't really cover it

pmlindyloo

Many people do not see tax credits as benefits but they are.

If you think about it logically, would you be able to save if you weren't receiving the tax credits? If you couldn't then effectively the tax payer's money is being used to give you a deposit for a house.

You could of course end your claim for tax credits, find ways of upping your income and decreasing your expenditure and save that way.

Or, you could take advantage of the current benefit system and save with your tax credits and when Universal Credit comes in end your claim, up your income and decrease your expenditure.

In order to save for a deposit you have to make some sacrifices.

Plenty of tips on here on how to do that!

41_and_i_know_it

Just do what you feel is right.
Don't involve organisations or ask a trusted person to save for you.
You deserve a house it is security for your 2 children and just because you are on CTC and CB, doesn't make you a lesser deserving person. Think past the negative, be inventive with your plan B because if plan A doesn't work then plan B, C, D etc will. There are ways around but if you don't look then you won't find.

kirstle99

We only get tax credits for the childcare. So obviously we pay some of this ourselves anyway. If we didn't have to pay for childcare we wouldn't be entitled to any tax credits I don't think, or a really really low amount.

Hmm. Maybe we need to re-think and just save when youngest goes to school in 3 years, when we aren't paying for any childcare.

Still gutted though

kirstle99

Maybe we should look at shared ownership then, there's a lot of those houses in our area

zagfles

banner188 wrote: »

Also, low earners will be significantly worse off under UC as well as out of work claimants which is the whole point of UC.

How, exactly? Most low earners will be better off under UC as the withdrawal rate is lower.

Plus as I said transitional rules will protect those with saving claiming tax credits.

BigAunty

kirstle99 wrote: »

Oh this is disheartening to hear, we won't be in a position to buy a house due to credit score for at least 3 years. We were going to use that time to try and save up a deposit.

Gutted doesn't really cover it

I actually came across a published DWP report which analysed this issue - claimants saving up for a property and if the govt should protect their savings from counting against them in the calculations for means tested benefits when UC is bought in - and basically (if my memory serves me correctly), the govt thought it was impractical and unfeasible to do this and few households have significant savings anyhow.

If you don't have a deposit, you are not in the position to buy a property, full stop, never mind your current credit score being a factor...

I know people see UC as punishing those with savings but I think it's the nature of tax credits (based on income rather than capital) that has skewed things. Prior to the implementation of tax credits, virtually everything apart from DLA and Child benefit, was means tested.

People who can't meet their basic living expenses and qualify for means tested benefits shouldn't be too surprised that they are not in the position to buy property - I expect the vast majority of home owners are outside of the benefit system and have good employment earnings.

Darlyd

I save under my mattress, may not incur interest but at least I do not have to worry about it. Not that We claim any benefits, I don't even claim the voucher scheme for child care, cant be bothered.