£16k in savings and £20k on Credit Cards - What would happen?

ClarkeKent

I read somewhere that if you have over £16k in savings you would not be entitled to benefits. What would happen if you had £16k in benefits BUT £20k in credit card debt due in 24-36 months due to long term purchase and balance transfer deals?

In essence, you would be -£4k in net assets. But how would the benefits office process it?

tomtontom

The DWP look at capital only, debt is not relevant.

pmlindyloo

if someone was claiming Universal Credit then they could use their capital (savings) to reduce the debt and this would not be considered deprivation of capital.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/473369/admh1.pdf

Scroll down to H1795

At the moment income based benefits such as JSA,IS, ESA would consider reducing debt (unless it was the subject of a court order) would consider this as deprivation of capital.

Possibly one good aspect of UC.

ClarkeKent

So if £8k of it was in a joint account, only £4k would be applicable to being recognised as savings for that individual claiming?

TELLIT01

ClarkeKent wrote: »

So if £8k of it was in a joint account, only £4k would be applicable to being recognised as savings for that individual claiming?

No. If the claimant has access to funds, as in a joint account, the total balance will be taken into account.

cheesetoast

I have to ask... why are you clinging onto £16k of savings, alongside £20k of credit card debt? What's the rate you're getting on the savings? What APRs are the cards charging?

konark

I think it was a hypothetical question.

HappyMJ

cheesetoast wrote: »

I have to ask... why are you clinging onto £16k of savings, alongside £20k of credit card debt? What's the rate you're getting on the savings? What APRs are the cards charging?

I do that. It's free money. I borrow at low rates such as 0% on purchases credit card and instead of paying the credit cards off each month I put my earnings into regular savers earning 6% interest.

I currently save £1,600 per month into regular savers (currently Lloyds, TSB, Nottingham, First Direct and HSBC) but I earn much less than that each month. Everything I spend I put on a credit card. I also borrow money as a personal loan at interest rates currently being offered of around 3.2% at Sainsburys and put that into high interest current accounts currently earning at least 3% or more each month and drip feed that into the regular savers.

bspm

HappyMJ wrote: »

I do that. It's free money. I borrow at low rates such as 0% on purchases credit card and instead of paying the credit cards off each month I put my earnings into regular savers earning 6% interest.

I currently save £1,600 per month into regular savers (currently Lloyds, TSB, Nottingham, First Direct and HSBC) but I earn much less than that each month. Everything I spend I put on a credit card. I also borrow money as a personal loan at interest rates currently being offered of around 3.2% at Sainsburys and put that into high interest current accounts currently earning at least 3% or more each month and drip feed that into the regular savers.

I do too, I never use my own money currently earning various interest from 3%-6% for purchases. Currently my interest is paying me £250 per month, why would I use it?

SPELLKASTER

How on earth have you got to being £20K in credit card debt!?

That's horrendous!!!

tomtontom

SPELLKASTER wrote: »

How on earth have you got to being £20K in credit card debt!?

That's horrendous!!!

Given your posting history that seems incredibly hypocritical!