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What should I spend my money on to avoid the Universal Credit savings limit?

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  • calcotti
    calcotti Posts: 15,696 Forumite
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    Pollycat said:Are you now applying for UC again?
    No, OP is on UC but spends less than his UC payments and is worried about his capital increasing - a most unusual problem!
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • poppy12345
    poppy12345 Posts: 18,880 Forumite
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    calcotti said:
    Paying down a student loan is certainly allowed - whether it’s a good idea is quite another matter. If you will never pay it off anyway it seems to me a waste of money.

    Right, but if I have to waste money somehow because I'm not allowed savings do you think that would be the best option?

    Up to £6,000 is disregarded. Savings over more than this will affect your UC by £4.35 per month for every £250 (or part there of) over that amount. Once you reach more than £16,000 you're not entitled to any means tested benefits.
  • huckster
    huckster Posts: 5,284 Forumite
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    edited 1 February 2021 at 5:51PM
    Why do you have excess money left each month, after spending benefit money on essentials ?
    I have encountered people in this situation and found they have a cooker that does not work properly, a fridge/freezer that could do with replacing, the food in their fridge is a selection of reduced or passed due date items etc.
    No problem in living frugally and saving.
    What about any Insurances that you can pay towards which will help you with say future care options ?  
    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.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    Spoonie_Turtle said: And yes I am painfully well aware that thousands of people claiming benefits are struggling to live.  We don't make the rules, and if people stopped claiming benefits to try to 'free up' money it wouldn't help, because the rules are what they are and people either qualify for help or don't.  We all know millions of public funds are wasted on vanity projects so a rare claimant having a few hundreds (maybe thousands - in which case even rarer) to spare is NOT the problem.  Just trying to shut down any potential discussion here before it starts.
    Agreed...
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Pollycat
    Pollycat Posts: 35,765 Forumite
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    edited 1 February 2021 at 6:35PM
    calcotti said:
    Pollycat said:Are you now applying for UC again?
    No, OP is on UC but spends less than his UC payments and is worried about his capital increasing - a most unusual problem!

    I was curious because you posted up-thread:
    calcotti said:
    I'm not sure I understand.  Are there things UC claimants are and aren't allowed to spend their benefits on?
    OP is not claiming UC. They want to claim UC but have more than £16,000 of capital and wish to dispose of some to bring themselves below the limit.

    Maybe the OP would benefit from a rethink of his/her spending habits e.g. is he/she sitting in a cold house because they don't think they should have the heating on?
    Is he/she eating well or buying cheap (and not nutritious) meals?
    Is he/she getting their feet wet because they have one pair of shoes and they have holes in?
    You know, sort of a reverse SOA (statement of accounts) that is often posted on the Debt-free wannabe board for people who need to reduce their spending.

    I'm thinking about the people you read/hear about who are starving and freezing but have £thousands in their bank account.
  • A_Lert
    A_Lert Posts: 609 Forumite
    500 Posts Third Anniversary Name Dropper
    I'm looking for advice on how best to spend the money I have to avoid the cap that comes with Universal Credit.
    Don't is the short answer. Legally it's not about what you spend it on, it's about the intention. If the intention is to stay eligible for more benefits, that's not allowed and you can be treated as though you still have the money.
    If you are building up savings, you should look at this as a strength and opportunity, not as a threat. Disability benefits are notorious for being stopped on arbitrary and unlawful grounds. If you have savings you are no longer at risk of destitution and death when that happens. Or if your health worsens and you suffer increased costs as a result, you have the money to pay those costs.
    Blowing it is a quick way into hardship. I know someone who had a few grand, then suffered a mental breakdown and spent it all and then some. At the same time their PIP was stopped and they're now living hand-to-mouth and paying significant interest on their debts. Don't go down the same route by choice!
    And Universal Credit does not operate on a cliff-edge basis. Rather, £6000 in savings is disregarded, and every £250 above that is regarded as providing a notional income of £4.35 a month, which is deducted from your UC payment.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    Pollycat said:
    calcotti said:
    Pollycat said:Are you now applying for UC again?
    No, OP is on UC but spends less than his UC payments and is worried about his capital increasing - a most unusual problem!

    I was curious because you posted up-thread:
    calcotti said:
    I'm not sure I understand.  Are there things UC claimants are and aren't allowed to spend their benefits on?
    OP is not claiming UC. They want to claim UC but have more than £16,000 of capital and wish to dispose of some to bring themselves below the limit.
    That was before OP clarified the situation.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Rubyroobs
    Rubyroobs Posts: 1,084 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    calcotti said:
    Paying down a student loan is certainly allowed - whether it’s a good idea is quite another matter. If you will never pay it off anyway it seems to me a waste of money.

    Right, but if I have to waste money somehow because I'm not allowed savings do you think that would be the best option?
    If you have too much money to live off, then yes feel free to give some back to the government. Hopefully it might find it's way to help someone who is struggling.
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