universal credit and savings?

clearingout

Just a query - single parent, working fulltime, small amount of savings but under the £6k threshold that I understand will be brought in with Universal Credit. My children all have savings accounts with what is a small amount in them in the big scheme of things but this money is in a normal children's savings account rather than the child trust fund accounts. Will this money therefore count towards the threshold for universal credit purposes (as it stands today, it will push me over the £6k threshold)? will I need to push it into their child trust fund accounts for it not to count? is there any issue with me putting it into the child trust fund accounts at this point (except the limits that are imposed on this annually) or do I risk the 'you're depriving yourself of money' issue?

thanks!

HappyMJ

clearingout wrote: »

Just a query - single parent, working fulltime, small amount of savings but under the £6k threshold that I understand will be brought in with Universal Credit. My children all have savings accounts with what is a small amount in them in the big scheme of things but this money is in a normal children's savings account rather than the child trust fund accounts. Will this money therefore count towards the threshold for universal credit purposes (as it stands today, it will push me over the £6k threshold)? will I need to push it into their child trust fund accounts for it not to count? is there any issue with me putting it into the child trust fund accounts at this point (except the limits that are imposed on this annually) or do I risk the 'you're depriving yourself of money' issue?

thanks!

If the money is soley in the child's name then it does not count.

If it is in your name and the account says "trustee for Miss clearingout's DD" then you have to demonstrate that you do not use this money ever for your own expenses and it's only ever used to buy things for the child such as clothing for the child amongst many other things.

If you were to transfer your own money into your DD's account then as long as the amount's are small then it doesn't matter. Personally I transfer £20 a week into my DD's account and that amount is fine. Large one off amounts big enough to look like you are trying to stay under £6,000 may not be looked upon so favourably. However, if my DD was saving for a large item such as a computer (or games machine or whatever) and I have agreed to go 50/50 with her when she has saved enough then I'd get a copy of the receipt and show that something was bought with the money. Normal expenses are fine to bring your savings down.

clearingout

Money is never used for anyone or anything! They're savings accounts and even through difficult times, I have managed never to take anything out - children haven't a clue about them. I set them one up each when they were born and I put in £10 a month each and my mum has contributed on birthdays and Xmas. It's not much but it's a start and will add up. I am not keen on the trust fund accounts precisely because you can't take it out again if you need it (and life has taught me that last few years that you really do never know what's ahead) but I would rather put the money in the trust funds now rather than have it push me over the threshold, if that makes sense?

HappyMJ

clearingout wrote: »

Money is never used for anyone or anything! They're savings accounts and even through difficult times, I have managed never to take anything out - children haven't a clue about them. I set them one up each when they were born and I put in £10 a month each and my mum has contributed on birthdays and Xmas. It's not much but it's a start and will add up. I am not keen on the trust fund accounts precisely because you can't take it out again if you need it (and life has taught me that last few years that you really do never know what's ahead) but I would rather put the money in the trust funds now rather than have it push me over the threshold, if that makes sense?

Are these accounts in the child's name or your name with a note saying "trustee for your child"? You can just transfer money directly into their name. As long as you can't access it and it won't count as your money. If you can access the money then it becomes harder to prove that it isn't yours. How old are they? If they are old enough (they need to be over 11) I'd get them to open up savings accounts in their own name...you keep the passbooks if you don't think they'll take care of it..and I'd transfer the entire balance of their account held in your name straight to them.

I have a Halifax children's regular saver and save4it accounts and council insists the money is mine although the account says "trustee for child".

clearingout

thanks, Happy. Not old enough - I'm 'caring' for the accounts. OK. I may transfer to their child trust funds and be done with it! I guess if I do it now before Universal Credit kicks in there's nothing to fear?

HappyMJ

clearingout wrote: »

thanks, Happy. Not old enough - I'm 'caring' for the accounts. OK. I may transfer to their child trust funds and be done with it! I guess if I do it now before Universal Credit kicks in there's nothing to fear?

Technically...you are doing ti to avoid having more than £6,000 which is the whole point of deprivation of capital which is to avoid anyone doing just that....but universal credits are still a long way off. New applicants will go onto UC first then eventually existing claimants will be transferred over...this will take years. So nothing to worry about for a long time. It is expected that exisiting claimants will be transferred over in 2017.

clearingout

it is very frustrating as I want to save for them but have limited funds to be able to do it and really don't want to be forced to spend what I have saved for them as I've kept my hands off it through a difficult 4 years and really want to keep it that way. They'll get nothing from dad so even a small contribution from me is better than nothing. Although the transfer to UC may be some time away, I would rather keep an eye on the situation as it stands. It seems to me to be sensible that I transfer the children's money to their trust funds accounts at this time and continue to pay my regular amount into the trust fund accounts so it is saved for their futures without any question. If it's really going to be 2017 before we are transferred over, an awful lot can happen and I might have nothing at all or far more in savings than I have now. Who knows?! But if I can ring-fence now and expect no problems then that would seem sensible. If UC are going to demand 4 years worth of bank statements when the change over comes, then so be it, they can make the decision then regarding deprivation of capital. Somehow I think it'll be more reasonable to have closed their savings and switched to trust funds now rather than the month before UC kicks in!

thanks for helping me clarify my thinking on this issue.

princessdon

clearingout wrote: »

it is very frustrating as I want to save for them but have limited funds to be able to do it and really don't want to be forced to spend what I have saved for them as I've kept my hands off it through a difficult 4 years and really want to keep it that way. They'll get nothing from dad so even a small contribution from me is better than nothing. Although the transfer to UC may be some time away, I would rather keep an eye on the situation as it stands. It seems to me to be sensible that I transfer the children's money to their trust funds accounts at this time and continue to pay my regular amount into the trust fund accounts so it is saved for their futures without any question. If it's really going to be 2017 before we are transferred over, an awful lot can happen and I might have nothing at all or far more in savings than I have now. Who knows?! But if I can ring-fence now and expect no problems then that would seem sensible. If UC are going to demand 4 years worth of bank statements when the change over comes, then so be it, they can make the decision then regarding deprivation of capital. Somehow I think it'll be more reasonable to have closed their savings and switched to trust funds now rather than the month before UC kicks in!

thanks for helping me clarify my thinking on this issue.

I think most know my feelings on this, I personally disagree with child savings being used BUT if they didn't how many would then simply transfer the money over. People will abuse it and move thier money into accounts with access that they had not previously wanted for their child.

It's people who abuse loopholes that cause this sadly.

sosad1968

It used to be the case that a family member could open a savings account for your child, so effectively they would be the "trustee" and you would not have any access to the money.

Not sure if this is the case still but it might be worth investigating to see if this is a legitimate thing to do in the circumstances.

pmlindyloo

clearingout wrote: »

Money is never used for anyone or anything! They're savings accounts and even through difficult times, I have managed never to take anything out - children haven't a clue about them. I set them one up each when they were born and I put in £10 a month each and my mum has contributed on birthdays and Xmas. It's not much but it's a start and will add up. I am not keen on the trust fund accounts precisely because you can't take it out again if you need it (and life has taught me that last few years that you really do never know what's ahead) but I would rather put the money in the trust funds now rather than have it push me over the threshold, if that makes sense?

And as far as means tested benefits are concerned this is the point.

You have access to the account and therefore it would be counted as your savings.

I am not trying to be difficult but this is how it is seen.

You need to find a way to do this so that you do not have access to the money.