Are we allowed to save?

kirstle99

It seems people think I am using benefit money to save for a house deposit. I must make it clear that i am NOT doing this.

We have set ourselves 3 years to save because we always save any overtime money we get, which can vary hugely depending upon the time of year (sometimes there is no overtime for months).

Like some have pointed out though, my youngest will be starting school by then so we will not have nursery costs, but will probably be using the school morning/afternoon clubs for both children. However, this will be so much lower than what we pay now, so hopefully saving in the long run is a good thing.

Thanks for your input everyone

banner188

zagfles wrote: »

Do you have any actual credible evidence for this? From what I've read (eg the white paper) the out of work amounts will be about the same, and the withdrawal rate will be lower so low paid people (eg min wage working under 16 hours) will be much better off than now. Since they won't have the combined 96% withdrawal as now, it'll be 65%. But there won't be the sudden cliff edge when WTC kicks in at 16/24/30 hours as now.

If you have any evidence to the contrary please post it. Or if you're assuming that will be the case "because that's what Tories do", I suggest you head off to discussion time as that's their level of debate

I think it will provide more of an incentive to work but will definately not improve anyone's income. You have a white paper? We have seen that many times before, it doesn't mean jack. It may be using anecdotal evidence, but it is safe to assume that the government will use it to save money as part of the crusade they are on.
The intial UC calculators confirm what I am saying, check them out.
Also, there will be council tax contributions and bedroom tax to factor in. These will naturally provide greater incentives to work due to greater the differential it will create.

I'm not totally against cuts or the general idea of UC but I prefer to deal with the reality and truth of what may happen rather than pipe dreams.

zagfles

banner188 wrote: »

I think it will provide more of an incentive to work but will definately not improve anyone's income. You have a white paper? We have seen that many times before, it doesn't mean jack.

A statement of govt policy means jack...if you really believe that try DT. We prefer to deal in facts here...

It may be using anecdotal evidence, but it is safe to assume that the government will use it to save money as part of the crusade they are on.

So no evidence at all then? Just what someone down the pub says, or you read in the Mirror?

The intial UC calculators confirm what I am saying, check them out.

OK...

http://policyinpractice.co.uk/universal-credit/universal-credit-calculator/

Couple with 2 kids in the North West, using default housing costs (£554.54 per month).

Firstly when out of work:

Under UC they'd get 1532.57 per month according to the calculator.

Under the current benefits (excluding council tax benefit and child benefit as they aren't being subsumed by UC):

JSA(IB): 111.45pw (482.95 per month)
CTC: 5925 per year (493.75 per month)
HB/LHA: 126.92 (549.99 per month) (max 3-bed LHA rate Manchester)

Total 1526.69 per month.

So under UC an out of work family get basically the same as now, just as it says in the white paper.

Now add in work. Using the defaults - 15 hour min wage (£403 per month) - they are £273 a month better off under UC in work compared to out of work.

Under the current system, the £403 per month earnings would simply be chopped off their JSA after the £10pw (£43pm) disregard, so they'd only be £43 a month better off in work!

So under UC, £236 per month better off than under the current system.

So it's all looking pretty much like the white paper said. Which is hardly surprising (except perhaps to those who prefer to rely on "you know what they're like" type anecdotes)

The white paper does also show that those who work on or just above the WTC threshold hours (ie 16/24/30 hours) could be worse off under UC, as there's a sudden spike in income when WTC kicks in. But then the lower marginal rates mean that as income/hours increase, UC becomes better.

This continues until HB/LHA entitlement has gone, when the UC taper rate actually becomes higher than the current system (76% instead of 73%), but by this stage we aren't talking about people on very low incomes. People on high'ish incomes who currently get tax credits could be worse off, and of course those with savings.

Also, there will be council tax contributions and bedroom tax to factor in.

The "bedroom tax" has nothing to do with UC. Just like with a lot of the other cuts, the changes have already been made before UC is implemented.

These will naturally provide greater incentives to work due to greater the differential it will create.

I'm not totally against cuts or the general idea of UC but I prefer to deal with the reality and truth of what may happen rather than pipe dreams.

Deal with it then.

1) People out of work will get about the same
2) People working under the WTC threshold hours will be better off
3) People working on the WTC threshold hours could be worse off
4) People on high'ish incomes getting tax credits could be worse off
5) People with savings who get tax credits will be much worse off.

But there will be transitional protection for those worse off - which we've discussed in detail here loads of times.

sunnyone

darlyd wrote: »

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.

DLA is a benefit.

You cant save for anything very expensive by saving it under your mattress due to anti money laundering rules.

MissMoneypenny

sunnyone wrote: »

You cant save for anything very expensive by saving it under your mattress due to anti money laundering rules.

And burglars and house fires:)

missapril75

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.

I know nothing of UC, but if this is correct it would suggest the OP could save as she hoped.

banner188 wrote: »

But after UC is implemented fully, people will be penalised if they try to save for a house.

Based on past changes, this would apply to those applying after the changeover date, not the OP who qualified under current rules.

I was around when Supplementary Benefit changed to Income Support and those who benefited from the Supp Ben rules (like fares to work being deducted from p/t wages, for example) had transitional protection so the I/S assessment didn't make them worse off.

So savings accrued by someone and disregarded prior to the change would likely continue to be disregarded under a new system IF zagfles is correct.

If the new system does not disregard them might the gain of having a deposit saved be greater than any loss?