Max savings allowed in order to get benefits

[TFab]

I have heard there is an upper limit to how much money you are allowed to have in savings to still be eligible for benefits. Does anyone know what the limit is? And at what age does this become relevant?

[49Twister]

If on benefits the maximum amount of savings is £6000. For every £250 savings above this up to £16,000 they deduct £1 weekly from your benefits. Over £16,000 you lose benefit. When you reach retirement age your allowed £10,000 before this affects benefits. This has always been the case unless it’s changed and I am unaware.

[TFab in reply to 49Twister]

Thank you so much

[49Twister in reply to TFab]

Just to add, this applies to all money in bank accounts in the persons name, including current accounts etc, not just a savings account. All money is combined and added together and all classed as savings.

[White25 in reply to 49Twister]

I rang up the benefit office and I was told savings are not affected by benefits.

[49Twister in reply to White25]

Can I ask what benefits you mean. I know PIP and DVLA are not means tested. But if your receiving ESA or UC, or housing benefit along with Pip/ Dvla this definitely affects your benefits. It's not OK to have more than £16,000 at any one time sitting in the bank, your benefits will be stopped and will have to live off your savings. If you see my reply above. Unless it's someone who works and receives PIP and no other benefits, or is under the age of 18. Not sure who you spoke to but that's not correct you cannot amass money if your receiving certain benefits.

[White25 in reply to 49Twister]

Hi, my daughter is in residential care and is awaiting pip, she has no other benefits.

[49Twister in reply to White25]

That's OK then thanks for clearing that up. Merry Xmas

[BenjiB]

It depends on the benefit. If it’s the old style Tax Credits, there is no limit. You just have to declare the interest earned.

For UC it’s £16,000.

Pip/DLA/carers allowance aren’t affected by savings.

scope.org.uk/advice-and-sup...

[49Twister in reply to BenjiB]

That’s a useful link but generally if someone disabled is claiming PIP/DLA their usually also claiming either UC/ESA/Housing Benefit etc which impacts on their savings and the limits apply regarding savings, I believe.

[BenjiB in reply to 49Twister]

Yes definitely. However we don’t know how old the person is or what benefit they are claiming. It may be someone under 18 which in that case they wouldn’t be claiming UC/esa/housing benefit. My son was on PiP only from 16-18. That’s why I posted the link because some benefits aren’t affected.

[49Twister in reply to BenjiB]

Very true thanks

[TFab]

That’s great info. My daughter is only 12 so it’s for the future really. I was looking at how best to save for her, but it sounds like it needs to stay in our name

[Eeviee in reply to TFab]

Unfortunately if you receive help from social care you will be subjected to a financial assessment and if the recipient of social care is deemed by social services to exceed what is called a minimum living allowance then some of the income of the recipient will be clawed back. It is a very complicated area but will probably affect your daughter when she gets to the age of 18 I believe. So you are right. All savings need to be in your name or consider setting up a trust for her.

[cautiouscandy]

Hi there,

I would second that from Eevie about setting up a Trust for your daughter. I have done this through a solicitor on the Mencap list of Solicitors who are said to have the knowledge for this purpose and I also picked one who was a member of STEP so should follow the relevant code of practise. STEP is the 'Solicitors or Society of Trust and Estate Planning'. A Discretionary Trust was best with my daughter in mind as she cannot handle her own finances and any money in the Trust is not deemed to be my daughters Capital because of the Discretionary nature of the Trust which means any Trust fund is only given out to my daughter or other beneficiaries of the Trust at the discretion of the Trustees (of the Trust). Very useful to avoid any possible exploitation of your daughter's finances if she is vulnerable in that way. You can be a Trustee yourself as well as someone else who has your daughters interests at heart, in fact there can be as many as four trustees. Mencap have a (Discretionary) Trust Company but you could not be a Trustee in that case but, as is usual, you can write a Letter of Wishes to say how you want the money to be used for your daughter's wants and needs, if you set up a Trust with them. There has to be a 'pool of beneficiaries' to meet the discretionary nature of the Trust. In mine I have my two able bodied sons also, as well as some other relatives and charities but my letter of wishes states, among it, what I want trust fund money to be used for in my daughter's case. My daughter's benefits are unaffected through this type of Trust because as I said before, any Trust Fund is not considered to be her Capital/ Savings or any of the other beneficiaries in fact. On benefit forms for my daughter, where they ask about Trusts, I wrote: She is a beneficiary of a Discretionary Trust please contact me for further information if needed. I was not contacted, most likely because any money in the Trust is not deemed to be hers because the Trust is a Discretionary one. My two sons are Trustees of the Discretionary Trust I set up, as well as them being beneficiaries. I trust them to give out money from the Trust fund for any needs my daughter has financially, ie that which Statutory Services or Benefits do not cover. She is not capable of doing paid work, and never will be, in order to provide her with further income, ie than any income she has in disability benefits etc. so a Trust works well to provide for her further, when needed. I should say that all Trustees have to agree on decisions about allocation of any Trust fund, as and when required for beneficiaries, so if you want to set up a Trust choose Trustees who you know are agreeable to what you want the Trust Fund to provide for your daughter (and any other beneficiaries). You can put further money into the Discretionary Trust Fund whenever you might want to do so. Despite your daughter being only 12 that does not mean a Discretionary Trust can't be set up with her being one of the beneficiaries. As I said, and sorry for repeating myself, you can be a Trustee, alongside other Trustees of your choosing, even if you are the Settlor, ie the one setting up the Discretionary Trust. That is how I proceeded when I set one up.

I hope that's not too much information to get your head round. Mencap probably have a fact sheet on Discretioanary Trusts.