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Claiming UC aged 45 two examples

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Claiming UC aged 45 two examples

edited 3 August at 9:46AM in Benefits & Tax Credits
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olb1olb1 Forumite
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edited 3 August at 9:46AM in Benefits & Tax Credits
If there were 2 people:
1. Owns 200k house no mortgage and 100k in a pension
2. Has a 100k mortgage on a 200k house and 200k in ISA but no pension
Both find themselves out of work aged 45,  are they both entitled to the same level of universal credit benefits?
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  • KatrinaWavesKatrinaWaves Forumite
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    The first person if it was in an accredited pension scheme would get UC

    The second with only an ISA would not. 
  • olb1olb1 Forumite
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    Does that example suggest then that maybe keeping minimal savings , but overpaying mortgage and maximising pension contribution would be a good plan in case you ever end up unemployed?
  • KatrinaWavesKatrinaWaves Forumite
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    If you are happy to live on only a benefits income, then yes.

    If you’d rather have accessible savings to carry on your standard of living, then no. 
  • comeandgocomeandgo Forumite
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    olb1 said:
    Does that example suggest then that maybe keeping minimal savings , but overpaying mortgage and maximising pension contribution would be a good plan in case you ever end up unemployed?
    Absolutely not.  You would need more than minimal savings but not over £16,000.  Try living on UC.  A lot of people are now discovering it's not enough to cover the most basic of their costs.
  • olb1olb1 Forumite
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    I'm just looking at worse case scenario. If no mortgage to pay then full UC may be ok to live on if you are frugal? I think council tax is less/nothing if on benefit as well. So it's just utility bills and food mainly which can be reduced .if you have savings over 6k (other than pension) these would be used against your claim so why would you want more? 
  • KatrinaWavesKatrinaWaves Forumite
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    olb1 said:
    I'm just looking at worse case scenario. If no mortgage to pay then full UC may be ok to live on if you are frugal? I think council tax is less/nothing if on benefit as well. So it's just utility bills and food mainly which can be reduced .if you have savings over 6k (other than pension) these would be used against your claim so why would you want more? 
    I think most people don’t think about ‘what if I was on benefits, best keep my money down’ they would rather have savings so they could carry on living normally rather than being frugal to live on bare bones. You may have no mortgage or council tax but I wouldn’t like to pay all my other bills, car and home maintenance, food and ‘fun stuff’ on a benefits income. So id rather save for the ‘just in case’ rather than think how to maximise the benefits I would get, as they’d still be very low 
  • Spoonie_TurtleSpoonie_Turtle Forumite
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    olb1 said:
    I'm just looking at worse case scenario. If no mortgage to pay then full UC may be ok to live on if you are frugal? I think council tax is less/nothing if on benefit as well. So it's just utility bills and food mainly which can be reduced .if you have savings over 6k (other than pension) these would be used against your claim so why would you want more? 
    I think most people don’t think about ‘what if I was on benefits, best keep my money down’ they would rather have savings so they could carry on living normally rather than being frugal to live on bare bones. You may have no mortgage or council tax but I wouldn’t like to pay all my other bills, car and home maintenance, food and ‘fun stuff’ on a benefits income. So id rather save for the ‘just in case’ rather than think how to maximise the benefits I would get, as they’d still be very low 
    Indeed.

    Just to be clear, OP, the full allowance for a single person over 25 is currently £409.89 per month - and that's only due to the pandemic; the original 2020 rate was supposed to be about £322. The pandemic increase is temporary, and due to stop in April next year.
  • olb1olb1 Forumite
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     £322 would be difficult however frugal you were! I would probably spend most of that on groceries alone. Guess i should save an emergency fund for 6-12 months in case of this situation arising.
  • hucksterhuckster Forumite
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    Better having minimal or no mortgage, if you were unlucky to find yourself unemployed for a long period.
    Savings can disappear at a quicker rate than most people think, if they have minimal benefit payments to cover basics.
    If you have a mortgage or secured loans, there are some lenders who appear to want to repossess, rather than offer any help.  


    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • olb1olb1 Forumite
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    Thank you, so a combination of pension, mortgage overpayments and s&s ISAs is the way to go, probably in that order!
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