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Stoozing while on Universal Credit can cost you money

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This is a warning to those not in the know. I have been on UC for 6 years. 3 years ago, I got a 0% interest card with a £5000 limit, so decided to Stooze. I spent up to the limit, saved the unspent money, and at the end of 2 years had earned nearly £500 in interest. Result! Or so I thought... 

What I didn't take into account was that on UC if your savings rise above £6000, they count every £250 or part thereof as a monthly income of £4.35. My stoozing took my savings to £10,000. My assumption was that as I had £5000 debt on my credit card, my net savings were under £6000. WRONG. UC does not deduct debt from savings. In their eyes I had £10,000, £4,000 over the threshold which for a year equals 16 x £4.35/ month x 12 = £835.20 in earnings. UC deducts 55p off your benefit for every £1.00 earned, so they have over paid me £459.36. That wipes out my interests earned from stoozing. And that's just for one year, I stoozed for two years. So I'm worse off. 

Comments

  • MattMattMattUK
    MattMattMattUK Posts: 11,151 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    This is a warning to those not in the know. I have been on UC for 6 years. 3 years ago, I got a 0% interest card with a £5000 limit, so decided to Stooze. I spent up to the limit, saved the unspent money, and at the end of 2 years had earned nearly £500 in interest. Result! Or so I thought... 

    What I didn't take into account was that on UC if your savings rise above £6000, they count every £250 or part thereof as a monthly income of £4.35. My stoozing took my savings to £10,000. My assumption was that as I had £5000 debt on my credit card, my net savings were under £6000. WRONG. UC does not deduct debt from savings. In their eyes I had £10,000, £4,000 over the threshold which for a year equals 16 x £4.35/ month x 12 = £835.20 in earnings. UC deducts 55p off your benefit for every £1.00 earned, so they have over paid me £459.36. That wipes out my interests earned from stoozing. And that's just for one year, I stoozed for two years. So I'm worse off. 
    Did you also declare the interest you received to UC as well as that is income.
  • ninianne42
    ninianne42 Posts: 4 Newbie
    Third Anniversary First Post Photogenic
    Yes, they have all the statements
  • eskbanker
    eskbanker Posts: 37,014 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    My assumption was that as I had £5000 debt on my credit card, my net savings were under £6000. WRONG. UC does not deduct debt from savings.
    As clearly stated online:

    All money, savings and investments you have in the UK and abroad are taken into account, including:

    • cash
    • money in your bank account, including your main bank account
    • current accounts and digital-only accounts such as PayPal
    • savings accounts: bank, building society, credit union, Help to Save, Post Office and National Savings and Investments (NS&I) accounts
    • [...]

    We do not take your debt into account when we work out your total money, savings and investments.

    https://www.gov.uk/guidance/universal-credit-money-savings-and-investments#what-we-take-into-account
  • ninianne42
    ninianne42 Posts: 4 Newbie
    Third Anniversary First Post Photogenic
    Yes, eskbanker, I know this now. It's unfortunate it isn't in block capitals on the website! :D 
  • ninianne42
    ninianne42 Posts: 4 Newbie
    Third Anniversary First Post Photogenic
    If only I had found the time in the midst of my serious illness and redundancy to read every page on the UC website - no defence in a court of law, I know, but it is the lived reality of many on benefits. Ho-hum.
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