Endowment maturing & benefits?

teddyboy02

Hi

I have an endowment which will mature in 3 yrs time.It was initially taken out to pay off my first mortgage of 45k,it will now pay out much less approx 25k.
This was taken out when i was working however i am now on benefits due to long term on going ill health issues.
When i became ill in order to keep our current house we had to change from a repayment to interest only mortgage.This has approx 10yrs to run and still sits at approx 75k with no means to fully pay it off.

My question is:

I would like to use my maturing endowment to lower the 75k.However as i am receiving benefits how will this effect them due to having a lump sum of approx 25k?
The benefits i/we are currently entitled to are contribution ESA,PIP and working tax credits.My wife works full time.

My 2nd question is:

I will also be left part share in my parents property when they die which would be worth approx 50k.How would this effect my benefits if at the time(hopefully many yrs yet)my circumstances/health have not changed and i am still not in employment?

This is causing me much worry which is impacting negatively on my wellbeing as i do not know the best course of action to do the best for my family who are already suffering financially due to me not contributing as i once did.

Kind Regards

pmlindyloo

Since you are on contribution based ESA then any capital does not make any difference to this benefit. PIP is not means tested. Working tax credit is only affected if you have over £300 of interest gained from any capital you have in the bank.

So none of your benefits will be affected by using your endowment policy to decrease your mortgage.

The same would apply if you receive your inheritance and remain on contribution based ESA.

Capital would only affect your ESA if it was income based. Since your wife works full time then you would not be eligible for income based ESA.

calcotti

Contribution ESA and PIP are not means tested and will not be affected at all by any capital you come into. Tax credits have no capital limits but if you receive interest on your capital you must disclose this.

I can not see any issue with using the endowment to pay down the mortgage as none of the benefits you have mentioned have any deprivation of capital rules.

TELLIT01

Even if it had been Income Related benefit I would be surprised if using the money from the endowment policy to pay down the mortgage was considered to be deprivation of capital. The express purpose of the endowment was to cover the mortgage.

calcotti

TELLIT01 wrote: »

Even if it had been Income Related benefit I would be surprised if using the money from the endowment policy to pay down the mortgage was considered to be deprivation of capital. The express purpose of the endowment was to cover the mortgage.

Agreed. .