Loans regarded as capital/savings?

ryan11111

I was wondering whether all types of loans are regarded or disregarded as capital or savings.

Does it make any difference if the loan comes from:

a) the bank
b) cash from a credit card
c) a person/friend etc

Thanks.

real1314

I don't think it makes any difference. Your capital is the amount you have in your accounts, as cash ect. There's no provision to offset against a liability, otherwise every mortgage holder could claim that.

suelees1

I agree.

The only disregarded capital would be from a personal injury payment for the first 52 weeks and then indefinitely if put in a PI trust.

ryan11111

Thanks for your replies. Aren't the rules a bit inconsistent? For e.g, when you consider another type of capital, such as property, if you're renting from a landlord the authorities don't view the house as your capital - of course it belongs to the landlord.

However, if you're borrowing or "renting" money from the bank or a lender, the authorities treat you as the owner of the capital - even though the lender, just like a landlord, gets "rent" on the capital they lend you and you have to return the money back to the owner in the end. Isn't that inconsistent?

dmg24

The property that a person lives in is not counted as capital in terms of assessing eligibility for welfare benefits.

lil_me

The way it was explained to me - If I transfered £10000 into my account tomorrow for example from my credit card it would be classed as capital

ryan11111

So 10k borrowed off a credit card in the form of cash and put in your account is regarded as capital. However, if you do the opposite and lend 10k to your mate, I'm sure the authorities would still regard the 10k as yours and not your mates who's borrowing it. Equally, 10k borrowed from your credit card is not your capital - it's the banks which has to be paid back in the end.

Another example - if I hire a car, are they saying they would view the car as being my capital instead of the car hire company's?

I know the rules are as they are, but don't you think they're not very consistent?

real1314

I'm really not sure what you want here?

Do you want someone to change the law? If so, you're wasting your time here; no-one here can do that. If you want someone to agree with you, will that change anything?

Your car hire thing is just being silly, as, if it was your car, they wouldn't regard it as capital.

I think this thread is dead, unless there's something else worthwhile in it, there are others more desrving of the time and advice people can give imho.

realshannon

here here! not inconsistent just common sense and the rules and regs that we all abide by - cant change them even if you dont agree or like them so .....

~Chameleon~

So, let me get this clear as it's something I've been wondering for some time now.

If I transfer say £5k from my credit card and put it into savings (stoozing) this is then regarded as capital and can affect my benefits?

The transfer of this money is for a limited period only, say 6mths on a 0% interest offer, therefore has to be paid back in full so would this then be classed as deprecation of capital or whatever they call it and would also affect my benefits?

If this is the case, then surely the DWP are just encouraging or even expecting people to get into debt and live off credit cards?

ryan11111

Thanks for your replies. Ok, I take the point that we can't change the law and must accept it. Maybe time to lobby my MP!

For e.g, a guy who has won 3k on the lottery can claim full benefits as he's within the 3k savings threshold. However, the poverty stricken guy who has taken out a 16k loan would be totally excluded from benefits.

But who trully owns most capital and is wealthiest? Clearly, its the lottery guy as he OWNS without question his 3K, while the guy who's borrowed 16k owns nothing and has to pay the capital back in the end, plus interest, to the lender. As I said before, isn't this as absurd as it would be if the DWP regarded for e.g your rented house, or a borrowed car, as your capital?