Am I allowed to invest? (UK)

Bozzi

Hello,

I'm currently recieving income-related Employment & Support Allowance (ESA) due to long standing illness. I've recently opened a Stocks & Shares ISA with Hargreaves Lansdown. I've deposited an initial sum of £120 & invested £100 of that sum into a Fund.

My question: Am I allowed to invest into Stocks & Shares Funds considering I'm receiving 'income-related' ESA? I'm asking this because within investments, 'funds can go up aswell as down' - (would that be classed as income if they go up?). As you can tell, I'm new to investing and I'm very confused about the rules regarding benefits and what your allowed/ not allowed to do, despite allot of research trying to get some answers on this issue.

What do you guys think? Am I breaking rules/ is there something that I have to declare/ is it perfectly alright for me to be investing whilst on this benefit/ is it classed as income in the eyes of the law? I mean, I'm incapable of working at the moment because of my condition, so I though why not do a bit of investing & play around while I recover, but now I'm worried that I'm doing something wrong and majorly stressed out because there is no clear answers out there.

Question put simply: Am I breaking benefit rules by investing within Stocks & Shares ISA funds whilst claiming Employment & Support Allowance (income-related).

I hope someone can shed some light on this, Thanks

Housing_Benefit_Officer

You can have whatever saving and investments you want - a long as your capital doesn't disqualify you from benefit if it exceeds a certain amount.

billywilly

If you are under 63, you are allowed to have capital/investments up to the value of £6000 without it affecting your benefit.
Over 63 and the limit is £10,000

rogerblack

billywilly wrote: »

If you are under 63, you are allowed to have capital/investments up to the value of £6000 without it affecting your benefit.
Over 63 and the limit is £10,000

Not for all means-tested benefits.
Specifically, not for ESA.
The limit does not change with age.

billywilly

rogerblack wrote: »

Not for all means-tested benefits.
Specifically, not for ESA.
The limit does not change with age.

I never knew that!

So if someone is beyond the date that they could claim Pension Credit (currently 63 I believe) but chose instead to carry on claiming Income Based ESA there are two different limits?

If they chose to continue with ESA instead of PC, is the award reduced at the same rate - £1 for every £500 of capital over the limit? Or does the ESA rate of reduction stay at £1 for every £250 of capital over the limit?

If the latter, and say someone has capital of £15000, they would have a reduction of their ESA award of £36 a week (£15000 - £6000, £9000 = £36)
But if they claimed PC instead they would only have a reduction of £10!!

Thankfully my ESA was contribution based, topped up by PC. But if it was Income Based, I would have still opted to keep the ESA going but drop the PC claim. At the time my capital exceeded £16,000 so there was only a £16 a week reduction. If I had have dropped the PC, I presume the Income Based ESA would have been closed down on me as the capital was over the upper limit?

That doesn't make any sense whatsoever, but I will go by what you say.

A very important factor to consider when you are over the age required to make a PC claim AND you are claiming Income Based ESA AND have capital over £6000.

abrockall

I had a £1 bond with nationwide building society and that prevented me from claiming income related ESA.
So for god sake don't do stocks and shares. It might not affect ESA but housing benefit will have you for fraud!

If you can afford to invest why you claiming benefits?

Murphybear

billywilly wrote: »

I never knew that!

So if someone is beyond the date that they could claim Pension Credit (currently 63 I believe) but chose instead to carry on claiming Income Based ESA there are two different limits?

If they chose to continue with ESA instead of PC, is the award reduced at the same rate - £1 for every £500 of capital over the limit? Or does the ESA rate of reduction stay at £1 for every £250 of capital over the limit?



If the latter, and say someone has capital of £15000, they would have a reduction of their ESA award of £36 a week (£15000 - £6000, £9000 = £36)
But if they claimed PC instead they would only have a reduction of £10!!

Thankfully my ESA was contribution based, topped up by PC. But if it was Income Based, I would have still opted to keep the ESA going but drop the PC claim. At the time my capital exceeded £16,000 so there was only a £16 a week reduction. If I had have dropped the PC, I presume the Income Based ESA would have been closed down on me as the capital was over the upper limit?

That doesn't make any sense whatsoever, but I will go by what you say.

A very important factor to consider when you are over the age required to make a PC claim AND you are claiming Income Based ESA AND have capital over £6000.

I was on income related ESA and as soon as I reached state pension age my ESA claim was automatically stopped by the DWP. I went on to SRP. I thought this was the norm.

Murphybear

abrockall wrote: »

I had a £1 bond with nationwide building society and that prevented me from claiming income related ESA.
So for god sake don't do stocks and shares. It might not affect ESA but housing benefit will have you for fraud!

If you can afford to invest why you claiming benefits?

Because, right or wrong, benefits are often awarded on "entitlement" rather than "need"

Housing_Benefit_Officer

abrockall wrote: »

I had a £1 bond with nationwide building society and that prevented me from claiming income related ESA.
So for god sake don't do stocks and shares. It might not affect ESA but housing benefit will have you for fraud!

If you can afford to invest why you claiming benefits?

How will we have someone for fraud for having stocks and shares?

As long as they are declared what would be the problem?

billywilly

abrockall wrote: »

I had a £1 bond with nationwide building society and that prevented me from claiming income related ESA..housing benefit will have you for fraud!

That would only happen if you already had £16000 in savings and then invested a further £1 taking the total to £16001

billywilly

Murphybear wrote: »

I was on income related ESA and as soon as I reached state pension age my ESA claim was automatically stopped by the DWP. I went on to SRP. I thought this was the norm.

Yes it is. My Contribution based ESA stopped on my 65th birthday when I started to get the SRP. However currently from age 63 to 65 (a couple of years back you could claim at age 60 -65) you have the choice to stay on Income Based ESA or cancel it and claim Pension Credit.
Many do this as well as those who are claiming JSA as it gets them out of having to do something for their money. Either being assessed for ESA or signing on looking for a job. They see it as their 'entitlement,' to me, it's playing the system!