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The DWP capital thresholds should be £10.5k and £27k

Theinternet

That is if they'd been adjusted to take into account inflation.

Given inflation the £6k and £16k thresholds from when they were introduced in 2006 are effectively £3.5k and £9.2k in 2025…

It also means that in 10 years from now the inflation adjust figures will be about £2.5k and £7k…

Given it took the DWP about 15-20 years to increase the thresholds (the previous were £3k and £8k) a threshold increase is long overdue.

I imagine politically it would be unpalatable but without it, the value of benefits will decrease over time and the thresholds will act as an even bigger disincentive for benefit claimants to pull themselves out of poverty. So remember what whenever they talk about social mobility. And remember that they are going to start monitoring peoples bank accounts based on these limits.

It feels like these thresholds are basically going the way of the Christmas bonus which was worth a fair bit of money (£10) when it was introduced but might buy you a multi-pack of Freddos now.

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Comments

Theinternet

And apologies if this might be in the wrong group, I'm not used to this forum.

Nightcity

I fully agree, unfortunately it'll unlikely change anytime soon.

They go on about getting people off, but ironically keep them on. So if someone was allowed to save enough because they want to leave the dwp system they can't because OF the DWP system.

Theinternet

https://forum.scope.org.uk/discussion/comment/1089056#Comment_1089056

I'd say about 1/3. The average is about £17k and that's not taking into account the equity they've built up in their principal home or the value of their pensions. And they also benefit from ISA tax allowances.

Benefit recipients are generally very poor by UK standards, few have any savings equity or meaningful private pension pots.

To add insult to injury they're much more likely to pay the high rents of the private sector.

Theinternet

https://forum.scope.org.uk/discussion/comment/1089062#Comment_1089062

I'm not disputing that millions of people who work rent in the private sector, remember too that almost 50% of UC recipients are in work too.

But the chances of you being affluent if you are in work is vastly higher than if you were on benefits. And I'm sure some politician's eyes will light up when I say this but it's absolutely true that there is no route out of poverty on benefits without working. Being on benefits, especially long term is how people remain poor and that is obviously made worse if you have no savings.

The only exception I guess is if you received some massive inheritance but that's the exception not the rule and not a social policy. Maybe it's an argument for the government creating some kind of universal inheritance fund maybe through a land value tax.

Theinternet

I accept though that non-means tested benefits like PIP is an exception to this rule. I should have been clear in not including that as there are plenty of wealthy people in work who receive PIP.

Trevor_PIP

AND the Personal Tax Free Allowance for hard working people should be raised too! Stuck at £12,570 per year since before lockdown and frozen to 2030..... Disgusting! There are people on benefits that get more than that per year.

Governmental/parliamentary Petition raised this year to increase the working people's Personal Tax Free Allowance to £20,000 and it has to be discussed by government due to the sheer amount of votes. Conclusion - not possible to do this currently as not affordable!

This needs sorting for working people too!

OverlyAnxious

Money will never be enough. People will always want more of it. And that keeps pushing up prices, meaning everyone else needs more money as well, creating a vicious circle.

Personally I'd prefer the gov't focus on 'things' such as accessible & affordable housing, accessible and effective health treatment, alternative forms of support for people who don't fit into perfect 'boxes'.

Money is only useful if it can be traded for goods or services. There's no point having more of it when we can't access goods or services to spend it on.

rubin16

I refuse to save money or have any large savings. I never want anything apart from necessities as to me money is the root of all evil. So I will always live by my means.

Also personally if your on benefits, I don't think you should have any large savings so the benefit cap is good as it is to me.

michael57

https://forum.scope.org.uk/discussion/comment/1089060#Comment_1089060

I should imagine most but not all people on benifits also get there rent paid and some council tax if you put that into the equation they are not doing to bad

Trevor_PIP

https://forum.scope.org.uk/discussion/comment/1089234#Comment_1089234

Agree!

Trevor_PIP

https://forum.scope.org.uk/discussion/comment/1089236#Comment_1089236

The working people's Personal Tax Free Allowance needs urgent review but was refused. I would suggest the working people get there review first for quite obvious reasons. The pathetic working people's Personal Tax Free Allowance could well be why some people choose not to work. I am happy I am not paying 40% tax out of my wages to that Accounts Clerk Reeves and that is definite!

vikingqueen

Should people who own their own home have a higher savings threshold than those who rent? Landlords are responsible for repairs but a home owner has to pay for their own..

michael57

I could imagine the public outcry if someone on benifits getting there rent paid by the government whilst having 27 grand for emergencies that the landlord would and should cover would go down rather well

Trevor_PIP

https://forum.scope.org.uk/discussion/comment/1089245#Comment_1089245

The current outcry is bad enough without additions.

michael57

https://forum.scope.org.uk/discussion/comment/1089247#Comment_1089247

Haha it would appear so

Theinternet

https://forum.scope.org.uk/discussion/comment/1089203#Comment_1089203

This is not about people having more money though, it's simply making sure they don't lose it.

You can have more money in your pocket next year, but not be wealthier. That's just how inflation works.

Theinternet

https://forum.scope.org.uk/discussion/comment/1089244#Comment_1089244

I don't mean to attack pensioners here as you could argue it's right that older people have higher capital thresholds as you're more likely to have savings as you get older but as indicated, we already do have the situation you describe as pensioners are much more likely to own their own home.

The lower threshold for pensioners is £10k and the tariff income is applied on every £500 above that, unlike those of working age where it's £250. The upper limit of £16k also doesn't apply to those getting Pension Credit and Housing Benefit.

They also are one of the only groups that are eligible to receive full housing benefit.

Theinternet

https://forum.scope.org.uk/discussion/comment/1089245#Comment_1089245

Well this is effectively what we had in 2006 and I don't remember the media going crazy over it. How times have changed huh? I guess it reflects how messed up our economy currently is.

Trevor_PIP

https://forum.scope.org.uk/discussion/comment/1089262#Comment_1089262

Maybe that should be done for working people too, so they don't get robbed for more tax paying for what you suggest? Inflation has not altered the working people's Personal Tax Free Allowance since before the lockdown and won't up to 2030.

Theinternet

https://forum.scope.org.uk/discussion/comment/1089267#Comment_1089267

No-one is talking about capital thresholds for benefits though, whereas there is currently a lot of political pressure on the chancellor over the personal allowance.

Ultimately, there's a general disdain in society for people on benefits, the media paint it as everyone on benefits being scroungers, or down the pub all day, living a lifestyle they wouldn't be able to afford in work. Despite many people claiming benefits because they're sick or disabled.

It's just how it is and it can affect a lot things, like where you can rent, whether you can get a mortgage etc, etc. It can also make mentally ill people very paranoid as they think everyone is trying to shop them for even just going for a short walk.