Savings when working out UC entitlement

cmbrookes

Hi
I am using the entitledto calculator and I would like to know if money is a LISA account classed as money my partner has to declare? The money I have in the LISA is money I am saving for a deposit for a house. If she has to declare it then this will lower our UC payments. How is a working person supposed to save for a mortgage when the money people save is being stripped from them?

calcotti

Yes it is. The value taken into account will be the amount in the LISA less the penalty charge for early withdrawal.
The benefits system does not take account of the desire to save beyond £16,000 regardless of purpose and anything over £6,000 will reduce entitlement.

cmbrookes

Thanks for the quick response. What is the point in saving when your expected to live off your savings? what a joke

cmbrookes

Also how will the benefits system know that I have a savings account? I bet there are plenty of people who don't declare it.

poppy12345

Universal Credit is a means tested benefit, which takes into account any savings, in any account, including savings you may have at home. You can't expect to receive benefits and keep your savings, it doesn't work like that.

If you don't declare all of your savings then this is benefit fraud. DWP will eventually find out that you have savings and you will need to pay back any overpayment that may have occured from this.

poppy12345

Aren't you already claiming UC with your partner? Previous thread here suggests you are. https://forums.moneysavingexpert.com/discussion/6221406/universal-credit-payslip#latest I'm assuming you declared your savings when you first claimed, if there was more than £6,000?

cmbrookes

Yes we are but I have been left some money and I have opened a LISA and put the money into a LISA. I want to know if I have to declare this money. I now have my answer so we will be declaring first thing in the morning, as much as it pains me to do it.

calcotti

cmbrookes said:

Also how will the benefits system know that I have a savings account? I bet there are plenty of people who don't declare it.

HMRC have details of all accounts and data matching with DWP will eventually reveal any accounts concealed from DWP. 

cmbrookes

Well it's good to know that everything is legitimate. You can guarantee that some people will try their luck. Thanks for answering all my questions anyway. A great forum!

Spoonie_Turtle

In fairness, they only deduct £4.35 for every £250 (or part) of savings you have over the £6000 threshold, up to an absolute maximum of £174 if you had £15750+ saved up (which I'm sure most people would agree would be a very nice financial cushion, especially in the context of needing money to survive).  Any month your savings went down a £250 step, for instance needing to make up the UC deduction, the deduction would then decrease anyway.

Alice_Holt

cmbrookes said:

a)  Also how will the benefits system know that I have a savings account?

b)  I bet there are plenty of people who don't declare it.

     a)  You'd be surprised. 
              https://www.gov.uk/guidance/digital-reporting-for-lifetime-isas
        HMRC and the DWP have shared information via the RTI system for some years now.
             https://www.turn2us.org.uk/Benefit-guides/Fraud-Investigations/How-do-fraud-investigations-work             https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/417718/tackling-fraud-error-debt-benefit-tax-system.pdf

     b)   There are plenty of people repaying UC overpayments, after making false declarations. 
            Quite a few who have faced a criminal fraud investigation.
                 https://www.gov.uk/benefit-fraud