Paying off mortgage on Universal Credit

Thunderstorms2

We have an £18000 mortgage and receive Universal Credit. My parents have offered to pay off £12000 of the mortgage, and we will use our savings to pay off the rest. Will this affect the benefits we receive? And does putting our savings towards the mortgage count as deprivation of capital?

Newcad

Paying off debt is never D-of-C for UC.

The thing that you need to watch though is that if your parents gift you £12k then from what you say about already having £6k to contribute yourself that gift would take your savings/capital to over £16k which would end your entitlement to UC. (If it's still not been paid to the mortgage company by the end of the UC AP in which you get the gift).

So it would be best for your parents to pay to the morgage direct if they can, or at least make smaller gifts to you over a number of months which you then pay towards the motrgage. That way always keeping your savings/capital under £16k.

How much in savings/capital do you have currently that you intend to pay your £6k from?

It may be better to use (some of) that to pay some mortgage off first before getting any from your parents.

For example: Pay £6k off the mortgage from your savings, your parents then gift you £6k so your savings are the same, next UC AP pay off £6k from your savings, your parents then gift you another £6k so your savings are the same, then the next UC AP pay off the final £6k mortgage and your savings have reduced by the £6k overall you intended without you ever going above £16k in savings.

Thunderstorms2

Thanks, Newcad, for such a quick reply. My parents were going to directly pay the money off instead of putting into our bank account. It seemed the simplest way, also we wouldn't have the issue of having over £16000.

After we pay off the rest of the mortgage with our savings, we would be left with about £2000, which we want to keep for emergencies.

Newcad

If it's done that way with your parents paying direct to the mortgage company then there is no problem with your savings.

As you say you currently have around £8k then you will be (should be) currently having a deduction from your UC for savings above £6k.

Reducing your savings to below £6k means that those deduction will stop being taken so your UC payments will increase.

Inform UC when your savings go below £6k.