Unspent money and UC

lhead123

Hi
We get about £400 a month in UC. We don't need the money to pay all our bills as we are quite frugal, so we treat it as 'extra' money. In the past it was used to pay off debt, however now we are debt free, that money is getting saved....we have a fairly unique situation, as most people struggle on UC - please no judging comments, we both work hard and live in an expensive area.

The 'issue' we have is that once we get to £6k in savings we will have to declare it to UC. We use YNAB and are a month ahead, which means we're already knocking on the £6k door, and will probably get there in the next few months. 
Our original plan was to save for a house deposit, however at £16k in savings, our UC would stop, and being on the south coast of England that is nowhere near enough for a deposit. I have also worked out that thanks to UC we are about £500 a month better off renting (even with rent at £1200 for a 3 bed) than we would be if we did somehow buy somewhere and pay a mortgage. If we got to £16k and UC stopped then we wouldn't be able to continue saving.

We can't possibly spend £400-£500 a month on random stuff, we are quite minimalist, we don't eat out very often, and our children are still young so we don't go out very often. We have reliable cars that we aren't interested in changing any time soon...

Are there any legal ways of saving for the future that don't count for Universal Credit savings? Someone told me private pensions don't count - is that correct? If not, then any idea what on earth we can spend £400-£500 a month on?! 

poppy12345

Savings of more than £6,000 will also reduce your UC by £4.35 per month for every £250 (or part there of) over that amount. Savings in a pension are ignored for all means tested benefits but it must be a pension pot, rather than just a savings acount.

No idea what you can spend your money on sorry.

xylophone

You both have a workplace pension scheme?
You might both increase your pension contributions.

[Deleted User]

Just go out and buy stuff, spoil your kids for Christmas, but a new sofa etc etc etc

xylophone

Perhaps you might make modest monthly contributions to your children's JISA accounts?

Spoonie_Turtle

It's hard to get out of a frugal mindset when you no longer need it if you've lived that way for a while already, so I know what you mean about not being able to just go out and buy random or expensive stuff. 

When you need to replace or upgrade things, you could go for things in the price range above budget/basic. How about days out to outdoor places like gardens or a railway or farms or whatever your kids might enjoy? They all cost money and it does add up, especially if you buy your lunch out rather than taking your own

I'll be honest though, if your UC eventually stops for a while, will it be a problem? If your monthly payment is about the same amount that you save each month, will it matter? If you need to redecorate, or upgrade or replace things like furniture, mattresses, clothing/bedding, appliances, then coming back down below £16000 will enable you to apply again. 

[Unless you meant you receive UC and £400 of that is left over every month, but that's not what your post said.]

theoretica

While it is a security risk, you have the option of buying resellable things.  Gold coins come to mind.

lhead123

poppy12345 said:

Savings of more than £6,000 will also reduce your UC by £4.35 per month for every £250 (or part there of) over that amount. Savings in a pension are ignored for all means tested benefits but it must be a pension pot, rather than just a savings acount.

No idea what you can spend your money on sorry.

Yes, This is what we are trying to avoid as much as we can I will have a look into pensions.

lhead123

xylophone said:

You both have a workplace pension scheme?
You might both increase your pension contributions.

Thanks, we are going to ask our workplaces this week if we can do this.

lhead123

xylophone said:

Perhaps you might make modest monthly contributions to your children's JISA accounts?

We already do this They're going to have a decent amount to hopefully put towards a car, insurance, part of a house deposit or university....though of course in the end it's entirely up to them what to spend it on.

lhead123

Spoonie_Turtle said:

It's hard to get out of a frugal mindset when you no longer need it if you've lived that way for a while already, so I know what you mean about not being able to just go out and buy random or expensive stuff. 

When you need to replace or upgrade things, you could go for things in the price range above budget/basic. How about days out to outdoor places like gardens or a railway or farms or whatever your kids might enjoy? They all cost money and it does add up, especially if you buy your lunch out rather than taking your own

I'll be honest though, if your UC eventually stops for a while, will it be a problem? If your monthly payment is about the same amount that you save each month, will it matter? If you need to redecorate, or upgrade or replace things like furniture, mattresses, clothing/bedding, appliances, then coming back down below £16000 will enable you to apply again. 

[Unless you meant you receive UC and £400 of that is left over every month, but that's not what your post said.]

You're correct - the UC that we get is the extra money we have at the end of the month. We are definitely planning some days out and holidays in the future. Ideally we don't want to get to that £16k figure until our kids are a lot older. When the oldest reaches 18 we will likely lose our UC anyway as our wages would wipe out what we would get without her on the claim - when she's nearing this age is when we wouldn't be so bothered by it any more....in the mean time I'd rather avoid jumping through hoops at the job centre and being looked at like you're the scum of the earth while validating documents etc. The job centre's are also only open weekdays meaning a couple of hours off work just to let them photocopy something and look down their noses at you....

There is also always the possibility of me moving up in my career in a few years time, and when my earnings go up we may end up earning too much to get UC anyway and can start saving for a deposit again...in the mean time I'll start looking into increasing our work pensions or getting private pensions......and hoping that one day LISA's stop being counted for UC.