Government 'slightly' overestimates interest rates

50Twuncle

Has anyone else noticed the new rules on savings/benefits ?

"If your capital is over £6,000 but not more than £16,000, it will affect your UC. Jobcentre Plus will assume you get a monthly income of £4.35 for each £250 or part of £250 of capital you have over £6,000."

This APR works out at over 20% - how do they think this possible ?

mikey_bach

21Twinkle wrote: »

Has anyone else noticed the new rules on savings/benefits ?

"If your capital is over £6,000 but not more than £16,000, it will affect your UC. Jobcentre Plus will assume you get a monthly income of £4.35 for each £250 or part of £250 of capital you have over £6,000."

This APR works out at over 20% - how do they think this possible ?

Oh I thought they told us the same rules for tariff income would be applied
£1 for every £250 0ver 6k.
not good

sulkisu

21Twinkle wrote: »

Has anyone else noticed the new rules on savings/benefits ?

"If your capital is over £6,000 but not more than £16,000, it will affect your UC. Jobcentre Plus will assume you get a monthly income of £4.35 for each £250 or part of £250 of capital you have over £6,000."

This APR works out at over 20% - how do they think this possible ?

I assumed that they considered the fact that you could/would use the capital to live off as well as any interest. I know that they reassess your capital after a period on reduced benefits, or you can ask for it to be reassessed. If they only considered income from capital as opposed to the capital itself, they wouldn't do this as the capital amount would remain the same.

50Twuncle

sulkisu wrote: »

I assumed that they considered the fact that you could/would use the capital to live off as well as any interest. I know that they reassess your capital after a period on reduced benefits, or you can ask for it to be reassessed. If they only considered income from capital as opposed to the capital itself, they wouldn't do this as the capital amount would remain the same.

They have a clear cut £16,000 limit - any more - NO UC
between £16,000 and £6,000 reduced UC.
Plus - I thought that the government were in favour of us all "saving for old age" - I think that this is extremely underhand........

If we can get 1.5% on savings - we are lucky - bringing in 31p per month on £250 !!

bloolagoon

21Twinkle wrote: »

They have a clear cut £16,000 limit - any more - NO UC
between £16,000 and £6,000 reduced UC.
Plus - I thought that the government were in favour of us all "saving for old age" - I think that this is extremely underhand........

If we can get 1.5% on savings - we are lucky - bringing in 31p per month on £250 !!

How is this different from the current benefits please?

sammyjammy

Tariff income is not related to the interest you get on your savings at all.

http://www.uki.net/php/files/welfarepages.uki.net/pb6.pdf

lazer

21Twinkle wrote: »

They have a clear cut £16,000 limit - any more - NO UC
between £16,000 and £6,000 reduced UC.
Plus - I thought that the government were in favour of us all "saving for old age" - I think that this is extremely underhand........

If we can get 1.5% on savings - we are lucky - bringing in 31p per month on £250 !![/QUOTE]

If this is all you are getting on savings you need to take a look at moving them

my ISA is paying 2.5% and I have the santander 123 account (paying up to 3% - or 2.4% net for me)

Also have first direct regular saver paying 6% and the flex direct paying 5% on the first £2,500.

Coraline

sulkisu wrote: »

I assumed that they considered the fact that you could/would use the capital to live off as well as any interest. I know that they reassess your capital after a period on reduced benefits, or you can ask for it to be reassessed. If they only considered income from capital as opposed to the capital itself, they wouldn't do this as the capital amount would remain the same.

This is correct--it's not an interest rate they are implying, it's a a method of means testing that in essence says "the more money in the bank you have then the amount of benefit you receive will decrease."

p00hsticks

21Twinkle wrote: »

Plus - I thought that the government were in favour of us all "saving for old age" - I think that this is extremely underhand........

If you save for old age by contributing to a pension, which cannot be touched until you reach old age, your pension pot is off limits and will not be counted toards any such means testing.

Some people also save "for a rainy day", but then seem reluctant to dip into those savings when that rainy day appears - they would rather that others paid for an umbrella for them.

SkyeKnight

mikey_bach wrote: »

Oh I thought they told us the same rules for tariff income would be applied
£1 for every £250 0ver 6k.
not good

It is exactly the same - £1 per week is £4.33 a month.

timbstoke

sulkisu wrote: »

I assumed that they considered the fact that you could/would use the capital to live off as well as any interest.

Which makes sense really. If you have £7k in savings, expecting you to contribute £17/month of that towards your benefits (or trim your lifestyle so that you don't have to) doesn't really seem that unreasonable.