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To be worried about receiving inheritance

(59 Posts)
OpheliaBoots Wed 17-Jun-20 12:42:50

I'll start off by saying that I know I am fortunate and that this is very much a first world problem...

I'm a single parent. I work full time but receive some UC which helps a lot. Minimal child maintenance from DC's father.

A family member died last year and I am due to inherit a part of the estate, although maybe not for a while as the house isn't on the market yet. I will possibly be looking in the region of about £30k, could be less depending on how much the house sells for.

I currently rent. Obviously my priority will be to try to buy somewhere of my own, but area is pretty expensive. Online calculators say I may get a mortgage of around £100k based on my income, which would give me a pot of around £125k to buy once I factor in fees etc. I could get a small 2 bed flat for this, maybe, but nothing great and in one of the rougher parts of the city. But it would be a start.

My worry is about the UC. Obviously (and rightly) this will stop as soon as I get the money. But if I can't afford to buy my own place straight away, it will leave me in the position of having to dip into the inheritance money to live, making buying my own place harder and harder.

I really want to use this opportunity to improve my life.

What would you do?

OP’s posts: |
haggistramp Wed 17-Jun-20 13:01:00

How would uc even know that you have received that money? If you know roughly when you are getting it, cant you arrange a mortgage in advance, and as soon ad its paid into your account pay it over to your solicitor dealing with the purchase? I certainly wouldn't judge someone trying to use an inheritance to better themselves.

runningon Wed 17-Jun-20 13:03:48

I agree, start looking for flats now & put an offer in (based on when you might get the money) then try and get the solictor to handle the sale so the money never actually is in your possession.
FYI I don't think UC will help you cover your mortgage, only give you a loan, so how will you pay your mortgage?

OpheliaBoots Wed 17-Jun-20 13:12:52

I am hoping that my mortgage payment would be a fair bit less than the rent I currently pay which will help a lot. I pay £800 a month in rent now. I also have a bit of debt that I would pay off which would decrease my outgoings too.
To be honest, I could live now without the UC payment if I'm very careful and have absolutely no treats. But having money sat in the bank seems dangerous if things are tight.

I would not feel comfortable not declaring the money, that does not seem like it would be legal.

OP’s posts: |
Jingstohang Wed 17-Jun-20 13:22:48

OpheliaBoots

I am hoping that my mortgage payment would be a fair bit less than the rent I currently pay which will help a lot. I pay £800 a month in rent now. I also have a bit of debt that I would pay off which would decrease my outgoings too.
To be honest, I could live now without the UC payment if I'm very careful and have absolutely no treats. But having money sat in the bank seems dangerous if things are tight.

I would not feel comfortable not declaring the money, that does not seem like it would be legal.

Yeah, you must declare it, you're absolutely right there.

GinDrinker00 Wed 17-Jun-20 13:26:45

How would you afford the mortgage if you rely on UC? They won’t pay it for you.
But yes your right you must declare it otherwise it’s fraud.

GabriellaMontez Wed 17-Jun-20 13:27:56

Sorry not to have more details,but there is a way in your situation to get 'permission' to have this asset for a few months without it affecting your UC. For situations like yours. Hope someone will come along who knows what it's called.

poisson428 Wed 17-Jun-20 13:29:57

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

Waxonwaxoff0 Wed 17-Jun-20 13:30:55

What element of UC do you receive? I'm not on UC but I get working tax credits and they are not means tested. I saved for a house deposit while getting WTC.

OpheliaBoots Wed 17-Jun-20 13:35:44

Waxonwaxoff0

What element of UC do you receive? I'm not on UC but I get working tax credits and they are not means tested. I saved for a house deposit while getting WTC.

The breakdown in my online statement says I get standard allowance, housing and children but there's no other breakdown

OP’s posts: |
OpheliaBoots Wed 17-Jun-20 13:36:13

GabriellaMontez

Sorry not to have more details,but there is a way in your situation to get 'permission' to have this asset for a few months without it affecting your UC. For situations like yours. Hope someone will come along who knows what it's called.

This sounds promising! I hope that's the case

OP’s posts: |
Euclid Wed 17-Jun-20 13:37:32

OP you are right, you must declare the money from the inheritance. I am shocked that a PP suggested that you should not do so. Not to declare it would be fraud.
Good luck with your purchase.

chargeorge Wed 17-Jun-20 13:38:16

I had the same thing but I wasn't on UC. However the solicitor dealing with the inheritance paid the money direct to my solicitor who was going to do the house transaction so it never went near my account - just a thought
Charlie

OpheliaBoots Wed 17-Jun-20 13:38:43

GinDrinker00

How would you afford the mortgage if you rely on UC? They won’t pay it for you.
But yes your right you must declare it otherwise it’s fraud.

It would depend on me getting a mortgage with a lower payment than the rent I currently pay. Also once I clear the but of debt I currently have, my outgoings will reduce.
If I can get a mortgage for, say £600 a month and save £100 on current debt payments, that's £300 a month less than i pay now, which is about what I get in UC, give or take.

OP’s posts: |
MadeForThis Wed 17-Jun-20 13:43:35

I don't think universal credits covers mortgage payments. Possibly the interest on the mortgage but only for a certain period of time.

I think you will lose the rent part of universal credits.

They won't pay for your asset.

OpheliaBoots Wed 17-Jun-20 13:45:45

Yes I totally understand I would not get UC if I am able to get a mortgage. Or if I do, it wouldn't be much.
I'm prepared to struggle a bit for a while to build a better future for us.

OP’s posts: |
HavelockVetinari Wed 17-Jun-20 13:46:34

Yes, PP is right, you will lose the housing element of your UC.

blackwellsj Wed 17-Jun-20 13:47:04

I think it might fall under H2119 but you would be best double checking with them directly obviously

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/832009/admh2.pdf

MintyCedric Wed 17-Jun-20 13:51:41

If you can time it right, the suggestion about the money being held by your solicitor pending completion of purchase is a good one.

I was in the same position as you when I got divorced and sale of matrimonial home was finalised 2.5 years ago. We had a small mortgage on it so my share was substantial.

I had an offer accepted on my current home in early December and everything completed early February so the solicitor paid the bulk of my settlement as the deposit and the remainder (about £5k) went into my bank account and I used that for furniture etc as I'd left with nothing and was living with family.

I would strongly recommend seeing an independent mortgage advisor, particularly if you have a friend/acquaintance who can give you a personal recommendation. I was offered a much better deal and a higher mortgage than going via online calculators.

If it helps you to estimate outgoings, my £90k mortgage with Natwest costs me £376 pcm.

XEAXii Wed 17-Jun-20 13:52:29

As an aside I would be surprised if your mortgage was anywhere near £600 unless it’s over a short period of time. Mine is £360 for the same size loan. That might help you.

OpheliaBoots Wed 17-Jun-20 13:52:43

blackwellsj

I think it might fall under H2119 but you would be best double checking with them directly obviously

assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/832009/admh2.pdf

Thank you so much. I will have a look into that

OP’s posts: |
OpheliaBoots Wed 17-Jun-20 13:53:25

XEAXii

As an aside I would be surprised if your mortgage was anywhere near £600 unless it’s over a short period of time. Mine is £360 for the same size loan. That might help you.

I'm hoping that is the case but I'm erring on the side of caution. Any lower than that would just be a bonus.

OP’s posts: |
OpheliaBoots Wed 17-Jun-20 13:54:35

MintyCedric

If you can time it right, the suggestion about the money being held by your solicitor pending completion of purchase is a good one.

I was in the same position as you when I got divorced and sale of matrimonial home was finalised 2.5 years ago. We had a small mortgage on it so my share was substantial.

I had an offer accepted on my current home in early December and everything completed early February so the solicitor paid the bulk of my settlement as the deposit and the remainder (about £5k) went into my bank account and I used that for furniture etc as I'd left with nothing and was living with family.

I would strongly recommend seeing an independent mortgage advisor, particularly if you have a friend/acquaintance who can give you a personal recommendation. I was offered a much better deal and a higher mortgage than going via online calculators.

If it helps you to estimate outgoings, my £90k mortgage with Natwest costs me £376 pcm.

I need to do this. Thank you so much. I will start the ball rolling, I do have a recommendation for a mortgage advisor

OP’s posts: |
MintyCedric Wed 17-Jun-20 13:55:20

Also, I'm not sure that having a mortgage would mean you can't get UC if you are working and have a child.

You can't claim housing benefit against a mortgage so you would lose that portion, but should still get whatever the equivalent is to working and child element.

I'm on WTC and CTC and having a mortgage makes no difference.

This is a really good calculator to use wrt working out how you might be affected.

www.entitledto.co.uk/?utm_source=BAdviser&utm_medium=referral&utm_campaign=GovUK

EmbarrassedUser Wed 17-Jun-20 13:56:37

Does the person in charge of the estate have to pay it to you straight away? If so, maybe you could have it at a later date. I’ve never dealt with probate so have no idea. I know when my mum offered me £10k, I didn’t take it for 2 years as I knew I’d be coming off HB and tax credits once I started a job after uni.

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