UC - Can debts be offset against Savings?

Gonkers

Hi - my situation - Firm I was an employee for collapsed at the beginning of the year and I was made redundant. I received Statutory Redundancy and statutory notice payments. Claimed New style JSA for 6 months, now ended. My partner has a part time job, approx 20 hours earning approx £750 per month gross.I borrowed an amount off a sibling as a short term loan which I am about to repay, and after that is repaid I'm down to the last 3K in my current account, which is about 3 months worth of mortgage and other household outgoings. I have 4K of credit card debt at 0% for another 18 months or so. We have approx 10k of other money, 2K in my partners current account and 8K in her savings/ISA.

So on thee numbers, I have 3K partner has 10K, card is -4K, so we either have 13K or 9K.

2 questions:

1 - Can I notionally offset the 4K of card debt against the savings, or do I need to physically repay the money off the card? If I repay the money I can't then borrow it again at 0% so I'd like to leave it there whilst I service it. I will still be between the 6K and 16K so there will be some form of reduction. advanced I am in discussions for a new role but this isn't going to start before November, when everything should be back on an even keel, so If I don't need to repay the debt I'd prefer not to.

2 - How much, if any of the cash at hand in our current account that we have can be considered as monthly outgoings rather than savings.

KatrinaWaves

You have to physically pay it off, you cannot offset it.

I believe money in your current account will currently be classed as capital as you are talking as if it’s been ‘going’ down so it’s not this months income. 

TELLIT01

With interest on savings being so low it makes even more sense to pay of credit card debts particularly if the card isn't in a zero interest period.

calcotti

For UC the savings deduction is £4.35/month for every £250, or part thereof, over £6,000.

Gonkers

TELLIT01 said:

With interest on savings being so low it makes even more sense to pay of credit card debts particularly if the card isn't in a zero interest period.

That's the point, it is 0% for another 18 months

calcotti

TELLIT01 said:

With interest on savings being so low it makes even more sense to pay of credit card debts particularly if the card isn't in a zero interest period.

From what OP has said I understand that the current debt is on 0% interest which is why they would prefer not to pay it off.

OP, although the debt is interest free if you are now claiming UC you will have to recognise that the £4,000 debt is effectively costing you £69.60/month (as against paying it off and reducing your our capital). Obviously if you hope that you will only be on UC for a short while it may be more flexible to take that hit in order to preserve the 0% interest over the outstanding loan period.

Gonkers

calcotti said:

For UC the savings deduction is £4.35/month for every £250, or part thereof, over £6,000.

OK that's great, thanks -  so for 4K it is approx £70 per month deducted.

Do you have to give a running balance each month? My partners income varies between say 725 and 800 per month gross depending on exact hours worked, but also our cash/savings balance is still likely to reduce further each month as that doesn't cover our total living expenses & mortgage for the month?

calcotti

Gonkers said:

calcotti said:

For UC the savings deduction is £4.35/month for every £250, or part thereof, over £6,000.

OK that's great, thanks -  so for 4K it is approx £70 per month deducted.

Do you have to give a running balance each month? My partners income varies between say 725 and 800 per month gross depending on exact hours worked, but also our cash/savings balance is still likely to reduce further each month as that doesn't cover our total living expenses & mortgage for the month?

The income received during the month does not count as capital. The capital figure is effectively the total of money in your accounts on the last day of the assessment period less the income received during that period. You only need to report a change if the change takes you through a £250 threshold which would therefore affect the deduction due. Bear in mind each time you report a change you may be required to produce evidence showing the balance in each of your accounts.

TELLIT01

calcotti said:

TELLIT01 said:

With interest on savings being so low it makes even more sense to pay of credit card debts particularly if the card isn't in a zero interest period.

From what OP has said I understand that the current debt is on 0% interest which is why they would prefer not to pay it off.

You're right calcotti.  I did read the OP but somehow still managed to miss the point that it is 0%.  I'll get me coat on the way out!

calcotti

TELLIT01 said:

calcotti said:

TELLIT01 said:

With interest on savings being so low it makes even more sense to pay of credit card debts particularly if the card isn't in a zero interest period.

From what OP has said I understand that the current debt is on 0% interest which is why they would prefer not to pay it off.

You're right calcotti.  I did read the OP but somehow still managed to miss the point that it is 0%.  I'll get me coat on the way out!

I’ve often overlooked relevant information in a post - it’s easily done.

born_again

Gonkers said:

TELLIT01 said:

With interest on savings being so low it makes even more sense to pay of credit card debts particularly if the card isn't in a zero interest period.

That's the point, it is 0% for another 18 months

So to pay that back & avoid any interest is £223 a month.
While it is at 0% interest. Better to clear it and have no debt.