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MSE News: Warning - if the state helps pay your...

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  • Danday
    Danday Posts: 436 Forumite
    edited 23 March 2018 pm31 11:21PM
    parkrunner wrote: »
    But if it means having your home for life then surely that's better than losing it.
    I presume that you are one of the 11% that has opted to take up the loan offer?

    Yes you will be able to live in your home, but at what cost to those that had hoped to inherit it on your passing? Surely you should be objecting to this scheme as well? Charging interest is obscene. Mind you in a time to come it wouldn't surprise me that all welfare benefits will be pad out as loans charged against your home. At least the government can say that they are doing something to equalise those that own their home set against those that rent - all or most of the equity will have to be handed to the Government.
  • Danday
    Danday Posts: 436 Forumite
    I think(hope) its a sign of things to come.
    When people pass away after claiming significant amounts in benefits their assets should repay the state, with minimal interest.

    I'd go further and let the govt offer an equity release scheme.
    May I ask if you own your own home?
  • Danday
    Danday Posts: 436 Forumite
    borkid wrote: »
    So people who work and buy a property then become ill will have to pay back but others who don't make the sacrifice will get it all given to them and not have to pay any back and if in private rented accomodation the taxpayer will be paying off the landlord's mortgage.

    I will add I don't claim anything although I have paid in for many years and get a reduced state pension ( I made some provision) but know of people who have had expensive holidays, large families and now claim HB. How is that fair?

    It's not fair in my opinion. But you must realise that when ministers look at the huge amount of money that people have sitting in their home, the temptation will always be to try to take some of it back - it seems that the government think that the equity is a dirty word.
  • parkrunner
    parkrunner Posts: 2,610 Forumite
    Eighth Anniversary 1,000 Posts
    parkrunner wrote: »
    But if it means having your home for life then surely that's better than losing it.
    Danday wrote: »
    I presume that you are one of the 11% that has opted to take up the loan offer?

    Yes you will be able to live in your home, but at what cost to those that had hoped to inherit it on your passing? Surely you should be objecting to this scheme as well? Charging interest is obscene. Mind you in a time to come it wouldn't surprise me that all welfare benefits will be pad out as loans charged against your home. At least the government can say that they are doing something to equalise those that own their home set against those that rent - all or most of the equity will have to be handed to the Government.

    My point still stands. It's still better than losing your home and any prospective benefactor in terms of receiving an inheritance would understand that, if they didn't then they don't deserve anything in the first place. I wasn't discussing the rights or wrongs of the subject just the practicalities.
    It's nothing , not nothink.
  • borkid
    borkid Posts: 2,478 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Car Insurance Carver!
    Danday wrote: »
    It's not fair in my opinion. But you must realise that when ministers look at the huge amount of money that people have sitting in their home, the temptation will always be to try to take some of it back - it seems that the government think that the equity is a dirty word.
    A fairer way forward then would be to recoup the money from taxation. If someone has claimed out of work benefits then when they return to work they pay an increased percentage of tax over a certain amount similar to the student loan.

    The longer I live the more it appears if you don't work/ plan for the future/ have a profligate lifestyle the more likely you are to be looked after. If you work/ save/ go without if you need help later on the more likely you are to be told no use you savings/ equity. Why bother. ( I do believe there should be a savings limit).
  • Danday
    Danday Posts: 436 Forumite
    borkid wrote: »
    A fairer way forward then would be to recoup the money from taxation. If someone has claimed out of work benefits then when they return to work they pay an increased percentage of tax over a certain amount similar to the student loan.

    The longer I live the more it appears if you don't work/ plan for the future/ have a profligate lifestyle the more likely you are to be looked after. If you work/ save/ go without if you need help later on the more likely you are to be told no use you savings/ equity. Why bother. ( I do believe there should be a savings limit).
    I agree entirely, I don't have a problem with that - if it works for students a similar system could work for the benefit system. however I do object to interest being charged on any advances of benefits. If they want to play that game they should add interest to the contributions made either via direct taxation or National Insurance.whilst people work.

    As for not seeing much in the way of benefit for being a good saver or buying your own home is quite correct. If somebody had told me when I was 16 on my first day of work that I had a choice of EITHER a lovely bungalow at age 65 handed to me with no rent to pay as benefits would cover the cost, no council tax to pay either, no maintenance costs AND live life to the full by spending every month what came in on good living, cars, holidays etc OR struggle to pay a mortgage for 25 years, pay out continously on maintenance and repairs, have very few holidays, run an old banger that broke down on a regular basis, I know what I would have chosen, the former. It seems that the more you try to save, try to secure a home the government wants to either tax it or take it from you.
    All I wanted to do was pass on what I owned to my children hoping that along the way the value would increase. How much of a fool I have been!
  • Tabbytabitha
    Tabbytabitha Posts: 4,684 Forumite
    Third Anniversary
    keith1955 wrote: »
    There is a factor that nobody is taking into account.
    I personally am unable to work, being severely disabled ( due to ongoing problems that occurred whilst serving in the Ambulance Service ), and survive now on benefits alone.
    I am loosing £80 per 4 weeks, ( Some people are loosing much much more than that I know ), and somehow have got to find the money to keep my mortgage payments up.
    This may not seem much to some people, but £20 a week is a lot to loose, and if I were to have taken the SMI loan, ( which My Wife and I rejected, at a 1.7% starting rate ), over the 7 and a half years we have left on our mortgage, at compound interest rates, and we were told by SERCO that the interest rate WILL go up TWICE each year, then we would have an extra £10K to £12K at least, added to how much we would have to pay, if not more. As whilst you pay the loan back, there is still compound interest being added to it. Also, downsizing, is NOT an option as where we live, smaller properties command a premium, and would cost the same as what we have.
    So, we are in our mid 60's. Can't afford to move and can't afford to borrow. Placing us between the devil and the deep blue sea.
    Is this fair when people in rented properties are getting so much of their rent paid for them.
    What we have worked so hard for all of our lives so as our children would have something after we are gone, it seems, doesn't matter.
    Also, SERCO PLC, I would like to point out, is a PRIVATE company and not the Government. So they are the lenders and the ones taking in the profits from it. So I think you will find it is them setting the interest rates and NOT the government. ( They told me this on the phone ).
    I feel very sorry for others who are in the same or a worse position than us. But hey, at least there is money for HS2 to save 10 minutes off the journey time.

    You were doing so well until you said that.:(
  • One thing that does strike me reading some of the stuff about SMI loans not just on here is the number of people who have reached retirement age who still have a mortgage that without state help they cannot afford.
    If the govt wanted to make savings on SMI and I'm sure they do! perhaps they could have thought about limiting it to a set number of years, my suggestion would be 10 maximum, that would give people more than enough time to downsize or move to a cheaper area.
  • skcollobcat10
    skcollobcat10 Posts: 331 Forumite
    edited 13 August 2018 pm31 10:38PM
    question answered
  • skcollobcat10
    skcollobcat10 Posts: 331 Forumite
    edited 13 August 2018 pm31 10:36PM
    question answered
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