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

calcotti

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!

poppy12345

oopsiedoopsie said:

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

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 ?  

Spoonie_Turtle

Have PMed you, but I will mention here:

Some altruistic options would be to donate to charity and to try to buy from ethical, sustainable companies that treat and pay their employees well - that way money goes back into the economy instead of into CEOs' pocket (and then out of the economy when they invest it in artwork and jewellery for themselves).

Those of us on a low income don't pay tax, but if we give some of any excess money we may have to charities (especially ones that help people in poverty) that's a contribution to society that probably does more direct and immediate good than if we tried to give some of it back to the government, to be honest!

And one other thing I didn't think of before, a reasonable holiday when it's safe (and if you're well enough) might be a nice thing to do.  I don't mean lavish, but comfortable, one where you get to relax and do the things you enjoy, but also get to put some of the spare money back into the local economy by not having to worry about how much things cost.

[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.]

calcotti

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...

Pollycat

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:

oopsiedoopsie 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

oopsiedoopsie said:

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

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:

oopsiedoopsie 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.

Alice_Holt

I would suggest the OP does a spending diary and a budget.  Most are aimed at decreasing spend.
The OP will be in the unusual situation of looking to increase expenditure.
So, for instance - increase spend on food by buying healthier options. 
Spend on things that increase his mental well-being -  music streaming, books, jigsaws, etc.
Putting the heating on to a more comfortable level / having hot water.    
Getting a good PC and being able to zoom family and friends, subscribe to online classes / talks around his hobbies
Spending on his care needs -  swimming, therapy, etc (when lock down eases) 

I would suggest the OP goes through each category of spend and considers how additional spending might improve his life. Then do a budget so that his outgoings match his income, and he is not just increasing his savings.  And then worrying about the level of those savings exceeding £16k.
(And not fritter / waste money through risky P2P loans, pointless purchases, etc)

Rubyroobs

oopsiedoopsie said:

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.