Sad for my friends £125k lottery win.

[Sogfree]

£125k win on the postcode lottery.

Single mum to 3 children (all primary age). Works as a TA, so receiving benefits to top up her income.

She would like to use her winnings for a deposit on a house. But due to the benefits rules not being allowed to pay a mortgage, she can't buy a property.

So she's going to spaff the entire lot as quick as she can, and the government will continue to pay rent to a multi property owner and make them richer.

The only asset she'll get to keep is a newer car - not anything fancy as she knows she won't be able to afford the insurance/fuel once the winnings run out.

Her one chance of breaking free of a life on benefits and she's got to throw it away. It feels wrong.

Only ridiculous if you see "coming into money" as something that should be ring fenced for a luxury purpose for the recipient. In fact, "coming into money" just means receiving even more free money they didn't earn/work for in the first place. There's no reason this money they have received free shouldn't be put towards their day to day expenses, the same as the money they get through benefits.

I had to come off benefits a few years ago. No complaints about that but when you do get back below 16k the dwp can also spot check you if they think you are spending your savings too quickly and they deduct over 4 pounds from your benefits for every 250 you have over 6k. It actually wasn't savings in my case it was money for another reason

They can also ask for proof of what someone has spent before it got back to the 16k

They can purchase property but they loose housing benefit.
Which is ok if they can afford to buy outright but its rubbish if it means they can't buy out right and still need a mortgage for the rest.

Its the same if you have someone who's been saving for a deposit, but been paid off they then struggle to get benefits as they are expected to live of the money they have saved up.

I don't think the £16k people are allowed in savings has gone up in the last 30 years. That might be part of the issue.

If someone has paid into the system its not free money

Unless she can justify her spending as essential and reasonable and not done for the purpose of remaining on or becoming entitled to benefit she will be treated as still having the money she has frittered away. She will need receipts/evidence on how the money was spent. She is entitled to a certain level of capital anyway. That will be in the benefit notes issued to her. These things people try to hide have an unpleasant way of biting you on the bum.

That’s not how the system works.

Many people receive benefits who have never paid a penny or very little into the system. The people who pay the most into the system (high earners) will likely receive very little ‘back’ as they won’t be entitled to much if they lose their job, due to means testing.

The system is there to help the people who need it, not to give people back what they’ve paid in. It’s not a savings account.

Only if they've been a net contributor. And in any event, it's immaterial. Benefits are a social safety net, not an entitlement whilst sitting on tens of thousands that could be used for the same expenses.

Snap, and savings account - quite! Every high earner/net contributor would be entitled to claim thousands if that was the case. As it is, the person who has paid tax at the top rate for decades and has fallen on hard times gets exactly the same as the person who has never worked a day in their life. Because it's a safety net, not an entitlement,

I know it's not a savings account. Very aware of that

Imagine going through life and seeing a £125k windfall as something to be sad about.

Even if she does splash the whole load on a bunch of fancy holidays, what a life-enhancing experience that would be!

Let alone if she chose to do something more fiscally and socially responsible with it.

I am aware of that. I came off benefits when I had far less money than 125k as per the rules

This is incorrect, if you inherit or have money given to you. As long as you use it to buy a property within a certain amount of time you can continue to receive universal credit.

Also I'm sure you can put it into children's isas as a loop hole too if you don't want to use all of it for a property purchase.

As an example I worked part time, had universal credit to help with rent and childcare. I then got 50k inheritance but because I bought a property within 6 months and used that money I could continue having my rent paid and then once I move into my mortgaged property, I still received universal credit but just for the childcare element.

Tell her to properly research before blowing it all.

Is this genuine? She's planning on blowing the lot and not even considering taking financial advice?

She should look into shared ownership. It would be ideal for this situation.

Your friend is a disgrace for having this attitude, and frankly, I judge you too for saying you are 'sad' about her win.

The median salary in the UK is 39-40k. After tax, a 40k salary works out as ~£32k per year. Your friend could live off this money (plus her current income as a TA) for four years and be financially better off than a significant portion of the population. After this time, her children would be older and she would likely be able to up her working hours. She could use this time to better herself so that instead of living off the tax payer she could support her own life choices.

God forbid she would do that though, as clearly she feels entitled to these handouts - which should be available only to people who really need them, and not someone who has 125k available to 'spaff' away (most working people, the people who are paying taxes, do not have 125k cash to hand!).

Your friend represents alot of what is wrong in this country. I hope her children don't inherit her attitude

Then you should be aware that (generally) those who take the most out won’t have paid much in, and those who pay the most in won’t be entitled to take much out.

Most benefits are means tested, so only those with little savings and lower incomes can access them.

I own my home with a mortgage and I claim benefits (universal credit and child disability payment for my son - we are in Scotland). She absolutely can buy a house with her winnings. It just means she wouldn’t receive the rent part of UC, but it would been that her work allowance would go up, effectively meaning she’d have less deducted from her benefits each month due to wages.
saying all that, she won’t be able to claim Ic at all while she has anything over 12k sitting in the bank! And if uc suspect she’s blown it all away just so she can go back to claiming benefits, they have the right to close her claim! They’ll want proof of what it was spent on. So she’d be better off using it to buy a property and being mortgage free, or having a very small mortgage.

the dss will say she has spent it idiotically and still not give her money.

where does she live that £125,000 isn’t a wonderful deposit for a two/three bedroom with a garden.

I actually worked either a lady who won £100,000 on the lottery, two children privately renting, and she bought a flat which was two rooms, a bathroom, cellar, garden, garage and a parking space for a very small car. The front room was the bedroom, set of bunk beds, bedroom furniture, the back room was the kitchen/living room with a sofa bed, dining table and three chairs, the other chair was in the bedroom, washing machine in the bathroom as she wanted a dishwasher, and the cellar for stioring everything.

a colleague laughed at her who was living with her three children in one room waiting for the illusive council house, it was uncomfortable to be there, because my friend said she owned her place, her children were secure, they were never going to be moved unless she decided they were going to move.

She is still there, with her children.

i think your friend is nieve if she thinks she can spunk £125,000 and the dss will say its ok.

or is this post a windup?

Yes you're right that it's generally but there are some that aren't means tested like JSA contribution based and Pip

I personally paid in for a long time before I claimed any kind of benefits - however I didn't have lots of savings nor was I a high earner.

Tell her to make an appointment with an independent financial advisor to get proper advice on what to do with it in her unique circumstances. If she doesn't, she's a fool.

Yes there are some that aren’t means tested, but very few. Contribution based JSA is one but it only lasts for 6 months.

The OP refers to benefits that are means tested, such as housing benefit.

She doesn't need a financial adviser or any advice other than the DWP, to whom she needs to immediately report this change in circumstances. They will advise her of the law.

Exactly. This post is inflammatory nonsense. There are loads of ways that kind of money could be used to benefit her and her children’s lives (if they are indeed real and not fictional to try and make a point)

She needs to speak to a financial advisor who can give her the best way to get the most out of this money in a positive and long lasting way.

She can't just ' spaff' it away thats deprivation of capital and benefits won't pay her . 125k closes her claim so she will need to live off that money wisely .