UC and Stocks investment via Credit card money transfer loans

dazzy999
dazzy999 Posts: 18
First Post First Anniversary Combo Breaker
Forumite
edited 2 December 2023 at 6:57AM in Benefits & tax credits
Hi,
I am considering applying for UC. I have invested some money in stocks which would be roughly around 10K. All this money was invested from money taken out from credit card money transfer so effectively it is from a loan which I have to pay all back. In one business account there are about 1.5k for the monthly payment of the minimum card payments which is around £150 per month. I am aware of declaring the stocks and money in the bank as capital, does it consider about the loan element that money invested is not from savings but actually from a loan. How does it work out? Thanks 

Comments

  • peteuk
    peteuk Posts: 1,211
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    I believe they dont ask about debt just savings and where they come from, as In some situations they are disregarded for a period of time.  The only time debt information is required is when using savings to pay off debt which is allowed when it comes to depreciation of assets.

    Im sure if this is incorrect someone with more knowledge than I will further advise you. 
     
    Proud to have dealt with our debts
    Starting debt 2005 £65.7K.
    Current debt ZERO.
    DEBT FREE
  • HillStreetBlues
    HillStreetBlues Posts: 3,051
    Photogenic First Anniversary First Post Name Dropper
    Forumite
    edited 2 December 2023 at 10:58AM
    peteuk is correct
    You can't counter credit  with a debt, So if you have £10k savings and £10k debt  with UC you are just classed as having £10k capital.
    You can cash in £4k worth of shares and pay of some of the debt to giving you £6k capital, this is allowed and would stop any deductions from UC.
    Personally I would sell of more shares to give some flexibility of not exceeding the £6k capital limit in the future.

    You could keep the shares, but at £10k would mean a deduction of £69.60 per month from UC
    Let's Be Careful Out There
  • HappyHarry
    HappyHarry Posts: 1,536
    First Anniversary Name Dropper First Post
    Forumite
    dazzy999 said:
    Hi,
    I am considering applying for UC. I have invested some money in stocks which would be roughly around 10K. All this money was invested from money taken out from credit card money transfer so effectively it is from a loan which I have to pay all back. In one business account there are about 1.5k for the monthly payment of the minimum card payments which is around £150 per month. I am aware of declaring the stocks and money in the bank as capital, does it consider about the loan element that money invested is not from savings but actually from a loan. How does it work out? Thanks 
    Borrowing money on a credit card to invest in shares is very foolish.

    There is a substantial risk that the shares will fall in value and you will end up with a larger credit card debt than the value of your shares. You could then find that a chunk of your limited income is required to pay the remaining debt.

    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
  • Muttleythefrog
    Muttleythefrog Posts: 19,682
    First Anniversary Name Dropper First Post
    Forumite
    edited 2 December 2023 at 1:12PM
    I would follow the advice of above posters - using credit to buy shares seems a bit silly even if the interest rate is temporarily zero not least since it could seriously distract from a good strategy for making money with the shares. And yes.. I would dispose of some or all shares and pay off debt before claiming otherwise your investment is actually going to cost you income from a U/C claim with savings over £6k. There is no debt offset in calculation of savings.
    "Do not attribute to conspiracy what can adequately be explained by incompetence" - rogerblack
  • dazzy999
    dazzy999 Posts: 18
    First Post First Anniversary Combo Breaker
    Forumite
    edited 2 December 2023 at 1:48PM
    dazzy999 said:
    Hi,
    I am considering applying for UC. I have invested some money in stocks which would be roughly around 10K. All this money was invested from money taken out from credit card money transfer so effectively it is from a loan which I have to pay all back. In one business account there are about 1.5k for the monthly payment of the minimum card payments which is around £150 per month. I am aware of declaring the stocks and money in the bank as capital, does it consider about the loan element that money invested is not from savings but actually from a loan. How does it work out? Thanks 
    Borrowing money on a credit card to invest in shares is very foolish.

    There is a substantial risk that the shares will fall in value and you will end up with a larger credit card debt than the value of your shares. You could then find that a chunk of your limited income is required to pay the remaining debt.

    Don't want to sound nasty, but the question is about UC,not investment advice or its risks. I am well aware of what is wise or foolish and what is risky. Thanks for taking the time to reply. 
  • dazzy999
    dazzy999 Posts: 18
    First Post First Anniversary Combo Breaker
    Forumite
    I would follow the advice of above posters - using credit to buy shares seems a bit silly even if the interest rate is temporarily zero not least since it could seriously distract from a good strategy for making money with the shares. And yes.. I would dispose of some or all shares and pay off debt before claiming otherwise your investment is actually going to cost you income from a U/C claim with savings over £6k. There is no debt offset in calculation of savings.
    Thanks for your advice. If I claim and it is a deduction of £69.60 per month from UC, I can live with that. I might sell some and keep some to sell at the right time so there shouldn't be a problem claiming, is that right? 
  • dazzy999 said:
    Thanks for your advice. If I claim and it is a deduction of £69.60 per month from UC, I can live with that. I might sell some and keep some to sell at the right time so there shouldn't be a problem claiming, is that right? 
    The deduction is £4.35 per £250 (or part of) over £6k, if over £16k entitlement to UC ends.
    The £69.60 would just be for shares of £10k, if you have capital elsewhere such as savings in bank  then a deduction would apply to those as well.
    Let's Be Careful Out There
Meet your Ambassadors

Categories

  • All Categories
  • 341.6K Banking & Borrowing
  • 249.6K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.5K Work, Benefits & Business
  • 605.8K Mortgages, Homes & Bills
  • 172.3K Life & Family
  • 246.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards