Low Income - No Benefits or Tax Credits Allowed!!!

8ofspades

If you've ever had to rely and depend on the welfare system, you'll know it's not nice and not a pleasant experience. Be thankful you don't have to worry about that and you have the bliss of being well-prepared, all on your own two feet.
It does suck that self-employment does not have the same luxuries as employment such a sick leave, paid holidays, etc.

xylophone

It seems to me that the OP should start a pension.

https://www.entitledto.co.uk/help/pension-contributions

A simple stakeholder would be a start.

https://www.cavendishonline.co.uk/stakeholder-pension

Alice_Holt

xylophone wrote: »

It seems to me that the OP should start a pension.

https://www.entitledto.co.uk/help/pension-contributions

A simple stakeholder would be a start.

https://www.cavendishonline.co.uk/stakeholder-pension

Quite agree.

Not arranging a regulated pension plan whilst working, but describing part of his savings as a "pension" is, I'm sorry to say, financial illiteracy.
His actions in not providing for his retirement in a sensible manner, have in part given rise to his current gripe that the level of his savings preclude him from claiming UC.

There are some good online resources that may help him improve his financial knowledge. Money Advice Service would be a starting point.
If he continues not to plan sensibly for his retirement years, I hope that the equivalent of Pension Credit still exists as he'll certaintly need state help (in addition to the state pension) at that stage.
I wonder if he's making the requisite NI contributions towards his SP. He would be advised to get a SP forecast to check current entitlement.

ROldfield

So the people who are saying about a pension yes you are correct and I should have one and I do want one however to put away the amount of money to bring me under the threshold never for credit would leave me with limited savings and if I was struggling for work and/or something was to break and I have only a small about of savings what do I do?

You can't dip into your pension if you need like you can savings.

8ofspades

ROldfield wrote: »

So the people who are saying about a pension yes you are correct and I should have one and I do want one however to put away the amount of money to bring me under the threshold never for credit would leave me with limited savings and if I was struggling for work and/or something was to break and I have only a small about of savings what do I do?

You can't dip into your pension if you need like you can savings.

£16k+ is a very large emergency fund.. surely you can hold back the equivalent of 6 months expenses, pay the rest into a pension pot and bring yourself under the £16k savings limit for means-tested benefits?

ROldfield

I will look more into it after looking at these comments.

There are two further downsides however:
1 - I suffer from bad anxiety and I feel that if I was to put a large amount of money into a pension scheme which I then couldn't touch it would affect my aniexty thinking what if something goes wrong etc.
2 - I'm sure we've read somewhere that UC look back years to see if you've moved any money anywhere so i'm not sure if the pension idea would work?

8ofspades wrote: »

£16k+ is a very large emergency fund.. surely you can hold back the equivalent of 6 months expenses, pay the rest into a pension pot and bring yourself under the £16k savings limit for means-tested benefits?

seven-day-weekend

I can certainly understand how the OP feels. It's as if he is being penalised for being thrifty when people with a larger income than him are receiving State aid to help them.

Unfortunately you won't receive any help until the savings are legitimately below £16k. Those are the rules and I am afraid there is nothing you can do about that. I don't think the savings limits are high enough, personally.

8ofspades

ROldfield wrote: »

I will look more into it after looking at these comments.

There are two further downsides however:
1 - I suffer from bad anxiety and I feel that if I was to put a large amount of money into a pension scheme which I then couldn't touch it would affect my aniexty thinking what if something goes wrong etc.
2 - I'm sure we've read somewhere that UC look back years to see if you've moved any money anywhere so i'm not sure if the pension idea would work?

It may count as deprivation if savings, but there's not enough info on this online - in my opinion, as you are self-employed with no formal pension pot, putting the money into a pension should not count - I would call for advice if you do want to take this route in order to secure benefits
https://www.entitledto.co.uk/help/Deprivation-of-savings-and-other-capital-Universal-Credit

Do you need the extra money to help with the child? I do get the frustrations that you feel like you are missing out but everyone has the same criteria there if they need it, and we all have the freedom to be silly or careful with our money. The welfare system has to draw the line somewhere, it allows you £6k of savings with no penalties which on a low income would be roughly 6 months emergency pot.

Tallaght

DWP would query any large withdrawals if you have to show bank statements.

NeilCr

TELLIT01 wrote: »

That is precisely my point. By spending every penny they earn, they can rely on state handouts. I speak from personal experience as my father and father-in-law both earned good money during their working lives. One purchased their own property and contributed to pension schemes. The other ****** it against the wall every weekend and lived in renter accommodation all their life. Come retirement one had their rent and council tax paid, etc etc. Who was the mug?

The problem is that no-one has yet devised a benefit scheme that is fair to all and rewards "good" people and punishes "bad" people. There will always be winners and losers and there will always be people just under or just over limits. There is no one size fits all. I saw someone this morning at CAB who neatly falls into one of the current gaps

Given your example here what would you suggest as a way of dealing with it without undue bureaucracy?

OP has been given solid advice about pension contributions etc. Unfortunately, as said, them's the rules and that's how they effect OP at the moment. Maybe the best way forward is to draw these inequalities to the attention of the local MP and lobby for changes