Are they savings?

Pixelat0r

Sorry if this is in the wrong thread, I really wasn't sure where to put it.

I purchased my first house in 1985 and, as was the wisdom of the day, took out an endowment policy for the full value of £12,500. Three years later we borrowed a further £6000 for improvements and took out a second endowment to cover it (£18,500 total). Then in 1992 we bought our current house but was advised not to cash in the endowments but instead to top them up with a third one to the value of £13,500 which meant we had £32,000 worth of endowment and paid £4,000 deposit towards the totsl house price of £36,000.

By today the first two endowments have matured but with the original £12,500 endowment realising just £10,000 and the £6,500 endowment realising just £4,500, I did what I thought was wise and locked them in fixed term ISA's which mature November this year (2016). The third endowment, and thus my mortgage, matures in March 2017 by which time I'd hoped the interest on the first two endowments would go some way to making up some of the shortfall.

Anyway, if you're still awake (thank you). I lost my job in December last year (2015) and claimed benefits. Because of a long term health issue I was placed on ESA though I continue to look for work. The benefits fairies told me they'd start paying my mortgage from March 4th 2016 but when I heard nothing I decided to ring them. It seems they's overlooked the two ISA's where the mortgage money was being held and decided to declare this cash as savings and would therefore not only not pay the mortgage interest ( a whopping £108 per month!) but had now declared I was not eligible for income based ESA and would be paying me contribution based instead up until December when it will stop. Because my wife doesn't work it also means they pay the single person's rate.

I spoke to C.A.B and various other sources including the building society and it was suggested I surrender the ISA's and take the interest hit (180 days) the pay this to the building society. This would leave me with a shortfall still but reduce the monthly payments to around £60.00 per month. This made sense so it's what I did. I then contacted the benefits fairies to explain my actions and ask if I could appeal the decision or re-apply. It was at this point they told me that I had deliberately deprived myself of capital and thus would refuse to help with the housing costs or pay me an income based ESA. So I'm trapped! :mad:

If I kept the ISA's I was disqualified for having over £16000 of savings while because I surrendered them and paid them to their rightful recipient I've deprived myself of capital! Is this right? And what, if anything can I do if I don't land a new job fairly rapidly?

Seems like it's those who try to do the right thing who get penalised. My in-law who has never worked a day in his life gets everything on a plate and least one foreign holiday every year and I sit up at night worrying about how to pay the bills. Any ideas please?

[Deleted User]

In a word yes they are 100% right, if you pay off debt before its due then you have deprived yourself of capital in order to obtain benefits.
Im not sure why they pay the single persons rate of esa when you have a partner who doesn't work?

Pixelat0r

Apparently because I'm now on contribution based ESA (I was on the full rate having passed the assessment) and because my wife hasn't paid contributions I now get the single rate??? At least that's what they said on the phone.

So what could I do in this situation? I clearly couldn't spend the money in the ISAs because technically it belonged to the building society and would have left me with an even bigger shortfall come March 2017? What if I had paid the endowment money to the building society on the days they matured? would that have been OK? Also, I paid the ISAs to the building society to reduce the monthly interest due to them because they refused to pay housing, NOT to swindle them out of benefits. Really not sure how both of my only two options could be wrong. Seems I had no viable option open to me.

GirlFromMars_2

This topic used to be raised regularly by the forum's resident troll Andy? Although this message has more detail & fewer disabled people, so who knows!

Either way, Contributions Based ESA is always a single person claim, only Income Related Benefits are paid at a couples rate.

Presumably you have been placed into the Work Related Activity Group which is only payable for 365 days, have you appealed to be placed into the support group? Support Group Conts ESA would be paid indefinitely.

Can your partner find a job?

So far as I can tell the Deprivation of Capital / Notional Capital decision was correct. There doesn't appear to be any provision for endowment mortgages.

Do you have capital in the property? You could downsize.

Have you contacted your MP? MPs are ultimately the only people who can change legislation, and unless they are aware of cases like this, nothing will be done to change things.

Pixelat0r

Well, I live in a small three bedroom terraced in a small village in one of the cheapest areas in Wales so I don't have a lot of scope to downsize, maybe a static caravan? My wife, who quit work to look after the grand kids, has less chance of getting work than I do. I am hoping to find work quickly but hope for the best and plan for the worst and all that.

Is there not an argument that the mortgage debt from the first two endowments became technically due on the day they matured?

The frustration is that I opted for an endowment mortgage based on advice from the government of the day, the very same people who are now penalising me for having one!

The only realistic third option I see would have been to live off the ISA's, have the house taken by the building society and applied for a council house, which would have cost them a lot more than the £108 per month (now £75 per month) I was hoping to get now.

I am in the Work Related Activity Group though I applied for that because they refused to take my limitations into account on JSA. I still intend to work at the earliest opportunity but who knows when that may be?

And you have my word my name is not Andy, or Andrew, or any other derivative of it :-)

Torry_Quine

Pixelat0r wrote: »

Well, I live in a small three bedroom terraced in a small village in one of the cheapest areas in Wales so I don't have a lot of scope to downsize, maybe a static caravan? My wife, who quit work to look after the grand kids, has less chance of getting work than I do. I am hoping to find work quickly but hope for the best and plan for the worst and all that.

Is there not an argument that the mortgage debt from the first two endowments became technically due on the day they matured?

The frustration is that I opted for an endowment mortgage based on advice from the government of the day, the very same people who are now penalising me for having one!

The only realistic third option I see would have been to live off the ISA's, have the house taken by the building society and applied for a council house, which would have cost them a lot more than the £108 per month (now £75 per month) I was hoping to get now.

I am in the Work Related Activity Group though I applied for that because they refused to take my limitations into account on JSA. I still intend to work at the earliest opportunity but who knows when that may be?

And you have my word my name is not Andy, or Andrew, or any other derivative of it :-)

You didn't apply for the WRAG that was decided on assessment.

Money in an ISA is counted as it isn't ring fenced although I totally understand that to you this money wasn't free for you to use.

Pixelat0r

Sorry, when I say I applied, I mean I applied for ESA not specifically for the WRAG which, as you rightly state was their decision. I just needed to get off JSA to give me time to find a job I felt I could manage.
Either way I intend to work as soon as an employer decides to let me but I still don't understand how the mere act of having a mortgage of the "wrong type" has penalised me so badly when I would be fine if I'd gone against government advice of the time and taken out a repayment mortgage.

Because I got up in a morning and went to work I now have a mortgage, a wife and a 17 year old daughter to take care of on a single-person's benefit which will stop dead in December if I haven't found work by then.

Torry_Quine

Pixelat0r wrote: »

Sorry, when I say I applied, I mean I applied for ESA not specifically for the WRAG which, as you rightly state was their decision. I just needed to get off JSA to give me time to find a job I felt I could manage.
Either way I intend to work as soon as an employer decides to let me but I still don't understand how the mere act of having a mortgage of the "wrong type" has penalised me so badly when I would be fine if I'd gone against government advice of the time and taken out a repayment mortgage.

Because I got up in a morning and went to work I now have a mortgage, a wife and a 17 year old daughter to take care of on a single-person's benefit which will stop dead in December if I haven't found work by then.

Its not the fact of the type of mortgage, that isn't of any interest to the decision makers. The advice to surrender the ISAs was wrong as you have found. If the endowment money had gone towards the mortgage then you would be alright and you would be able to get income based benefits.

Can your daughter help out?

marliepanda

If your wife quit work to care for grandkids, then I'm guessing you have some older children too?

The free childcare will have to stop, can they contribute to your income so there getting cheap childcare and helping you?

Pixelat0r

But I was no better off had I kept them alive because they classed them as savings so disqualified me from housing help and income based ESA. Had I paid the endowment money directly to the building society I would be in real trouble with no realistic way to pay the mortgage next March. I appear to have shot myself in the foot by trying to make up a shortfall that, while not huge to some people, is a ridiculously large percentage short of the supposed surrender value. My decision to try to reduce this large shortfall by investing it wisely has saved me a few hundred off the shortfall and now looks likely to cost me my house.

It's because I couldn't afford to pay the interest on the mortgage and all the other outgoings that I was left with no choice but to surrender them and pay them off the mortgage and reduce the monthly mortgage interest. It wasn't a choice I had, it was the only way I could afford to live.

My daughter is in sixth form and is looking for part time work but we have around three buses per day and none on a Sunday so it's tough for her to find an evening or weekend job. I drive luckily...at the moment.

Pixelat0r

marliepanda wrote: »

If your wife quit work to care for grandkids, then I'm guessing you have some older children too?

The free childcare will have to stop, can they contribute to your income so there getting cheap childcare and helping you?

The two older girls live in a rented house and a council house and work part time in a local supermarket. I have to argue with the wife to stop her giving them money! At least when I was working I did. We may have the views in Wales but the money isn't great. :-) I have suggested she look to become qualified as a child minder then get paid that way.