can someone assist me

brokebutsober

Gonna be out of work due to disability. Been saving near 2 decades for the savings i have. The avings go above the limit so will not be able to get UC. Iv been saving so hard for a house but looks like i have to throw it all away. I know its disregarded for a year but i need longer to be able to save up. Iv been declined mortgages as credit isnt that good. Can anyone recommmended a savings account or such that isnt classed as savings limit. I will not be taking anything out of it for years to come.

poppy123456

brokebutsober said:

Gonna be out of work due to disability. Been saving near 2 decades for the savings i have. The avings go above the limit so will not be able to get UC. Iv been saving so hard for a house but looks like i have to throw it all away. I know its disregarded for a year but i need longer to be able to save up. Iv been declined mortgages as credit isnt that good. Can anyone recommmended a savings account or such that isnt classed as savings limit. I will not be taking anything out of it for years to come.

Savings are only disregarded for one year as part of managed migration if moving from Tax credits to Universal Credit. 

Otherwise, if you have savings of more than £16,000 you're excluded from all means tested benefits, which includes Council Tax reduction and Universal Credit (though some LAs have a maximum savings limit of £6,000)

There's currently no bank accounts or savings accounts where you can put any money in that will allow you to claim any benefits if you have savings of more than £16,000. This includes any money not in any bank account.

You can pay into a pension pot or a (SIPP) but if you're not currently working the most you can put in is £2,880 a year, which will be topped up to £3,600. More information here. https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/the-annual-allowance

However, with a pension pot you won't be able to access it until you're at least 55 but this is rising to 57 from 2028.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/when-can-i-take-money-from-my-pension

If you have worked and paid NI contributions in the previous 2 tax years you can claim New style ESA. It's not means tested so other savings/capital and pension income of up to £85/week will not affect the amount you're entitled to. It pays £84.80/week (25 and over) increasing to £129.50/week if placed into the Support Group. You will need a fit note to claim this and SSP1 form if you were recently claiming SSP from an employer. Full details here. https://www.gov.uk/guidance/new-style-employment-and-support-allowance#how-to-apply

If you're not currently claiming a disability benefit and you're not living in Scotland then you can look at claiming PIP, it's not means tested either so savings/capital and other income will not affect the amount you maybe entitled to. Whether there's any entitlement will totally depend on how your conditions affect you. https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/pip/

https://www.citizensadvice.org.uk/Global/Migrated_Documents/adviceguide/pip-9-table-of-activities-descriptors-and-points.pdf

Jimm_Scope

Hi @brokebutsober, welcome to our community I understand the struggle with savings, benefits and a poor credit rating. I really struggled with my finances as a young adult.

There can be exceptions when it comes to buying a home, however they are only for a few months and you must prove you are looking for, or are already in the process of, buying a home.

You could discuss this exception with whoever is handling your case at the DWP, but the onus of evidence is on you. You have to prove to the DWP, quite strictly, that is what the money is for. It's really not something I would rely on as the DWP are very strict with it.


I would speak with your local citizen's advice, if you are off work due to disability then as Poppy says you may want to look at PIP or ADP if you are in Scotland.

brokebutsober

Hi, and thanks for the response.

Can i ask more in regards to the pension account. I have a nationwide account so could i open an account there and if so what would happen should i need to pull the money out in an emergency.

Im fine with waiting however long till you reach pension age but ideally i need to put the money somewhere so i can claim uc. It somehow feels so unfair after wprking and save all this time now i have to thro it away so i can stay afloat.

poppy123456

Jimm_Scope said:

Hi @brokebutsober, welcome to our community I understand the struggle with savings, benefits and a poor credit rating. I really struggled with my finances as a young adult.

There can be exceptions when it comes to buying a home, however they are only for a few months and you must prove you are looking for, or are already in the process of, buying a home.

You could discuss this exception with whoever is handling your case at the DWP, but the onus of evidence is on you. You have to prove to the DWP, quite strictly, that is what the money is for. It's really not something I would rely on as the DWP are very strict with it.


I would speak with your local citizen's advice, if you are off work due to disability then as Poppy says you may want to look at PIP or ADP if you are in Scotland.

I’m afraid that’s not correct in this case. It’s my understanding that brokebutsober is saving for their first home so the disregard doesn’t apply. 

It only applies when you’ve sold the home you currently live in and waiting to purchase another. 

In such a case capital can be disregarded for at least 6 months, longer if a decision makers decides it’s reasonable to do so. 

See link and scroll to H2119 and H2120
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1182983/admh2.pdf

chiarieds

Hi @brokebutsober - & welcome to the community from me also.

Have you considered shared ownership? Would this be a possibility? Please see: https://www.gov.uk/shared-ownership-scheme

https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/

poppy123456

brokebutsober said:

Hi, and thanks for the response.

Can i ask more in regards to the pension account. I have a nationwide account so could i open an account there and if so what would happen should i need to pull the money out in an emergency.

Im fine with waiting however long till you reach pension age but ideally i need to put the money somewhere so i can claim uc. It somehow feels so unfair after wprking and save all this time now i have to thro it away so i can stay afloat.

Unfortunately a nationwide bank account or any other savings accounts, including ISAs will still mean that you’re disregarded from claiming all means tested benefits if you have more than £16,000. 

Unfortunately you can’t just hide the money because DWP will eventually find out. 

A SIPP (self invested personal pension) are not bank accounts. See link https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/self-invested-personal-pensions

Do you qualify for New style ESA as per my advice above? 

brokebutsober

chiarieds said:

Hi @brokebutsober - & welcome to the community from me also.

Have you considered shared ownership? Would this be a possibility? Please see: https://www.gov.uk/shared-ownership-scheme

https://www.moneysavingexpert.com/mortgages/shared-ownership-scheme/

hii, i have come across shared ownership but ideally i wanted something freehold so as to not pay rent. Will i be able to sell back a shared ownership

brokebutsober

poppy123456 said:

brokebutsober said:

Hi, and thanks for the response.

Can i ask more in regards to the pension account. I have a nationwide account so could i open an account there and if so what would happen should i need to pull the money out in an emergency.

Im fine with waiting however long till you reach pension age but ideally i need to put the money somewhere so i can claim uc. It somehow feels so unfair after wprking and save all this time now i have to thro it away so i can stay afloat.

Unfortunately a nationwide bank account or any other savings accounts, including ISAs will still mean that you’re disregarded from claiming all means tested benefits if you have more than £16,000. 

Unfortunately you can’t just hide the money because DWP will eventually find out. 

A SIPP (self invested personal pension) are not bank accounts. See link https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/self-invested-personal-pensions

Do you qualify for New style ESA as per my advice above? 

Iv got back into work a year and half ago but you state 2 years so i assume it wont be. I feel like im being penalised for being so frugal about money. But i will have a loot at the sipps account

perdita

Hi @brokebutsober, due to taking my 25% tax free sum of my pension I invested it in Shared ownership. It has been the best thing for me, however there are some real advantages but equally some pitfalls which you need to carefully think through.
In answer to your question it is very rare that Housing Associations will buyback your share. There have to be very mitigating circumstances for them to do this. However you can sell your share on the open market after the HA has tried to sell it on their sites. Very often younger individuals use any increase in equity to move on to the open market. 
Remember that you have to pay both rent and mortgage (if applicable) and the combined total needs to be less than 45% of your income even if benefits will cover the rent and service charge. Also if you need a mortgage for your share then lenders have a different calculation for how much they will lend. Saying that I am aware of many buying a shared ownership house who are on benefits.
Hope this helps a little as I understand and sympathise with your current situation.

chiarieds

perdita has helpfully answered your question, & mentioned some of the pros & cons. Selling a shared ownership home is also mentioned on both the links above.

poppy123456

Coming back to this after some thought about the SIPP, which i didn’t think of when I advised above. 

Whilst putting money into a pension is allowed when claiming UC, if you put your money into a pension and then claim UC it could be classed as deprivation of capital in order to claim a means tested benefit. For this reason you could be treated as still have the savings and your UC will be refused. 

Apologies for incorrect information! I’m currently looking through the UC regulations to see if i can find some confirmation of this. @chiarieds any help to try to find that is greatly appreciated please! I know you're much better than me at looking through all those regulations! Thanks in advance!

poppy123456

brokebutsober said:

poppy123456 said:

brokebutsober said:

Hi, and thanks for the response.

Can i ask more in regards to the pension account. I have a nationwide account so could i open an account there and if so what would happen should i need to pull the money out in an emergency.

Im fine with waiting however long till you reach pension age but ideally i need to put the money somewhere so i can claim uc. It somehow feels so unfair after wprking and save all this time now i have to thro it away so i can stay afloat.

Unfortunately a nationwide bank account or any other savings accounts, including ISAs will still mean that you’re disregarded from claiming all means tested benefits if you have more than £16,000. 

Unfortunately you can’t just hide the money because DWP will eventually find out. 

A SIPP (self invested personal pension) are not bank accounts. See link https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/self-invested-personal-pensions

Do you qualify for New style ESA as per my advice above? 

Iv got back into work a year and half ago but you state 2 years so i assume it wont be. I feel like im being penalised for being so frugal about money. But i will have a loot at the sipps account

You may qualify even though you've only worked for the past 1.5 years. It will depend on earnings and NI contributions. You can check your NI records here. https://www.gov.uk/check-national-insurance-record

brokebutsober

perdita said:

Hi @brokebutsober, due to taking my 25% tax free sum of my pension I invested it in Shared ownership. It has been the best thing for me, however there are some real advantages but equally some pitfalls which you need to carefully think through.
In answer to your question it is very rare that Housing Associations will buyback your share. There have to be very mitigating circumstances for them to do this. However you can sell your share on the open market after the HA has tried to sell it on their sites. Very often younger individuals use any increase in equity to move on to the open market. 
Remember that you have to pay both rent and mortgage (if applicable) and the combined total needs to be less than 45% of your income even if benefits will cover the rent and service charge. Also if you need a mortgage for your share then lenders have a different calculation for how much they will lend. Saying that I am aware of many buying a shared ownership house who are on benefits.
Hope this helps a little as I understand and sympathise with your current situation.

Hi, that sounds very good. So if i can buy a share in home ownership how does it work like i own 25% but will the lease expire. If so is all my money gone ? any other links you can give with this shared ownership will be greatfuly recieved.

brokebutsober

poppy123456 said:

brokebutsober said:

poppy123456 said:

brokebutsober said:

Hi, and thanks for the response.

Can i ask more in regards to the pension account. I have a nationwide account so could i open an account there and if so what would happen should i need to pull the money out in an emergency.

Im fine with waiting however long till you reach pension age but ideally i need to put the money somewhere so i can claim uc. It somehow feels so unfair after wprking and save all this time now i have to thro it away so i can stay afloat.

Unfortunately a nationwide bank account or any other savings accounts, including ISAs will still mean that you’re disregarded from claiming all means tested benefits if you have more than £16,000. 

Unfortunately you can’t just hide the money because DWP will eventually find out. 

A SIPP (self invested personal pension) are not bank accounts. See link https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/self-invested-personal-pensions

Do you qualify for New style ESA as per my advice above? 

Iv got back into work a year and half ago but you state 2 years so i assume it wont be. I feel like im being penalised for being so frugal about money. But i will have a loot at the sipps account

You may qualify even though you've only worked for the past 1.5 years. It will depend on earnings and NI contributions. You can check your NI records here. https://www.gov.uk/check-national-insurance-record

Il have a look, if it allows me that would be good

brokebutsober

poppy123456 said:

Coming back to this after some thought about the SIPP, which i didn’t think of when I advised above. 

Whilst putting money into a pension is allowed when claiming UC, if you put your money into a pension and then claim UC it could be classed as deprivation of capital in order to claim a means tested benefit. For this reason you could be treated as still have the savings and your UC will be refused. 

Apologies for incorrect information! I’m currently looking through the UC regulations to see if i can find some confirmation of this. @chiarieds any help to try to find that is greatly appreciated please! I know you're much better than me at looking through all those regulations! Thanks in advance!

I see, so if i open a sipp, it would be classed as trying to get rid of funds to claim UC. That hurts, iv spent so many years saving it. Better not to seek UC and carry on working even though i cant. Would be funny paying back into the system that didnt help.

poppy123456

brokebutsober said:

poppy123456 said:

Coming back to this after some thought about the SIPP, which i didn’t think of when I advised above. 

Whilst putting money into a pension is allowed when claiming UC, if you put your money into a pension and then claim UC it could be classed as deprivation of capital in order to claim a means tested benefit. For this reason you could be treated as still have the savings and your UC will be refused. 

Apologies for incorrect information! I’m currently looking through the UC regulations to see if i can find some confirmation of this. @chiarieds any help to try to find that is greatly appreciated please! I know you're much better than me at looking through all those regulations! Thanks in advance!

I see, so if i open a sipp, it would be classed as trying to get rid of funds to claim UC. That hurts, iv spent so many years saving it. Better not to seek UC and carry on working even though i cant. Would be funny paying back into the system that didnt help.

Unfortunately, it's highly likely going to be this way and seen as deprivation of capital. Once your savings go below £16,000 then you can claim UC but there will be a deduction of £4.35/month for every £250 or part thereof over £6,000.

I know the rules are tough but unfortunately, it's the law. Savings of more than £16,000 there's no entitlement to any means tested benefits.

Please do look at New style ESA. If you're currently still working and are unable to carry on for now, have you looked at claiming SSP from your employer?

Benefits really are the bare minimum (to start with at least) so do bear that in mind too.

perdita

Hi, if you buy a share in a new build which there are plenty of then your lease should be fine (mine is 250 years) but you have to be careful on resales as anything under 80 years you would struggle with and extending leases under 90 years are very expensive. I believe that there may be some new legislation in the offing regarding leases but this could be many years away and only affect new builds. There is also a scheme called Heylo homes which do both letting and a form of less traditional shared ownership. In this scheme if you pass their affordability checks then you can choose a house on the open market which is very appealing as you can choose in your area of choice. However they are not one of the housing associations which are 'not for profit' meaning that their rent is a little more expensive than traditional Housing Associations and are not governed by any Government regulations. So this year when the Government capped rent increases to a maximum of 7% they didn't have to abide by this. Don't know what they did as I am not with them. But just a thought to check any Housing Association you are interested in...check whether they are registered as not for profit.

perdita

One other benefit of shared ownership @brokebutsober is that you are exempt from bedroom tax even though you rent from a housing association 

chiarieds

As far as I can see, then SIPP is indeed a form of personal pension, which would be seen as capital (ADM Chapter H1: capital; para H1020.3):  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1163111/admh1.pdf    I can't find anything contrary to this.

poppy123456

chiarieds said:

As far as I can see, then SIPP is indeed a form of personal pension, which would be seen as capital (ADM Chapter H1: capital; para H1020.3):  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1163111/admh1.pdf    I can't find anything contrary to this.

Thanks. Yes, capital but because a pension can't be accessed it's likely to be seen as deprivation of capital and they will still be classed as having it.