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.

Yep, I hate how benefit claimants are all lumped into to one homogenous mass that are assume to be laughing at taxpayers, and sitting with their hands out and expecting everything. And if they come into money, then all of them will spaff it away and hide it to stay on benefits.
I am rubbish with money, but I know people who claim who have the most beautifully meticulous spreadsheets about every penny they have going in and out their account. If they came into a big sum like OP's friend, they would be making sure it went to good use for them.

She could buy more than the 25% share with her 125k, and claim housing element for the rent aspect.

Yeah. Until 18 months ago I was living on less than 400 quid a month. Funny how people think you sit with your grabbing hand out when you are poor and stressed all the time.

And someone a few pages back called me entitled because six years ago my flat had to be sold and I had some money in the bank

You can't win. You are lazy. A scrounger. Entitled. Even if you are on UC and work

I know lots of people in the same situation as me. Most of them trying to improve their life by studying part time

I know one girl who's husband works full time but they claim UC as they have three disabled kids and they have really high rent.

Life happens to people.

Gift it to her kids:

1. Using a Bare Trust or Junior ISA

Option A: Bare Trust

• A bare trust is a simple legal structure where money is held for the child until they turn 18.
• Key points:
• Money is legally the child’s, not hers.
• She cannot control the money, just appoint a trustee (herself initially can act as trustee).
• DWP generally does not count money in a properly structured bare trust as her capital, because it’s no longer her money.
• At age 18, the child receives full control.

Steps:

1. Contact a solicitor or financial adviser to set up a bare trust for each child.
2. Deposit £60,000 per child (assuming two kids) into the trust.
3. Keep proper documentation showing the money belongs to the children.
4. Inform DWP that this money is held in trust for the children, not her.

Option B: Junior ISA

• A Junior ISA (JISA) is another way to hold money for a child until they turn 18.
• Key points:
• Maximum annual contribution per child is £9,000 (2026/27).
• Money in the JISA belongs to the child, not the parent, so may not affect her benefits.
• Could split £18k into £9k in one tax year and £9kthe next.

Steps:

1. Open a JISA for each child.
2. Deposit money up to the annual limit per year.
3. Keep clear records for the DWP showing the money is now the child’s.
4. Other Considerations

• Documentation is key: DWP will want proof that the money is no longer her capital.
• Avoid direct transfers to the children’s personal accounts, because that money is still considered her gift, impacting benefits.
• Legal and financial advice is recommended, especially for bare trusts, to ensure it’s fully compliant with DWP rules.

Op
find a lottery winner financial adviser. They do exist. Niche bur still there.

in the trust put the money in a global index tracker like VWRP. If the kids never touch it until their retirement they’ll be multimillionaire retirees. Thats the beauty of compounding and starting early. Don’t let her throw it away, this is a chance to escape for the next generation.

Yes, OP's friend has been called entitled despite her working as a TA. TA wages are shit, hence why she gets a UC top up.
I bet none of those posters would say that to the faces of the TAs who work with their kids. Funny that.
On another thread, someone referred to anyone on UC as "spongers" despite UC being made up of various benefits, including the tiny amount a carer gets. The people most vocal about UC and claimants often have no clue what it is, what it is for, and how little if can be.

I hope things are better for you now.

And i don’t think for a second you or your friend are benefit scroungers.

There are some really mean jealous people out there with nothing to add but shit green eyed nastiness. Try to tune out.

help your friend. She could change the lives of her kids beyond comprehension if she plans this well.

And get to grips with an AI like chatGPT or Claude. They’re good starting points for ideas and further exploration for your friend.

Here’s chatGTP with £60k over 40years in VWRP:

Perfect, let’s calculate this carefully, step by step. We’ll assume the user means VWRP – Vanguard FTSE All-World UCITS ETF (accumulating), which tracks global equities.

1. Assumptions

• Initial investment: £60,000
• Investment horizon: 40 years
• Average annual return: historically, global equities have returned ~7% per year after inflation, ~9–10% nominal. Let’s calculate nominal growth.
• Compounding frequency: annually

1. Future Value Formula

The formula for future value with compounding: FV=PV×(1+r)nFV=PV×(1+r)nWhere:

• PV=£60,000PV=£60,000 (initial investment)
• r=0.08r=0.08 (assume 8% annual growth as a reasonable long-term estimate)
• n=40n=40 years

1. Step-by-step calculation

• FV=60,000×(1+0.08)40FV=60,000×(1+0.08)401+0.08=1.081+0.08=1.08
• 1.08401.0840 — let’s calculate carefully:
• 1.0810≈2.1591.0810≈2.159
• 1.0820=(1.0810)2≈2.1592≈4.6641.0820=(1.0810)2≈2.1592≈4.664
• 1.0840=(1.0820)2≈4.6642≈21.751.0840=(1.0820)2≈4.6642≈21.75
• Multiply by initial £60,000:

FV≈60,000×21.75≈£1,305,000FV≈60,000×21.75≈£1,305,000✅ Result

• £60k invested in VWRP at 8% annual growth for 40 years could grow to ~£1.3 million.
• With more conservative 7% growth, it would be ~£60,000 × 14.97 ≈ £898,000.
• With higher 9% growth, it could reach ~£60,000 × 31.4 ≈ £1.88 million.

💡 Key takeaway: Even a relatively modest £60k invested globally for 40 years can grow massively due to compounding — over a million in realistic scenarios.

if you endure it’s in an ISA, that’s a tax free £1.3 - £1.8m for EACH child in 40 years time.

It looks complicated but it’s not. You just stick it in VWRP, and forget about it and go back to your old life and get on with it. Most people won’t be able to do this but that’s what I’d do,

ChatGPT is telling you that the stock market only goes up and goes up by 7% as a conservative estimate.

Err, no. It can drop. In 2007 it dropped and didn't reach 2007 levels for ten years!

So you might think CGPT can't predict the future.

....and any way, the OP's friend needs the money to live on.

TA wages are shit, hence why she gets a UC top up.

If a job doesn't pay enough to feed and house you the solution is to work longer and /or get a better paid job. The solution is not to get other people to pay for your outgoings.

The fact we're giving away so much money to these people that they regard winning £125k as unfortunate says it all. We've had it. :(

It’s still worth the risk over 40y.

you could keep the money all in cash and be left with £60k cash in 40y time but we all know the purchasing power would be minimal after 40y of inflation.

inflation is already eating away 3% every year at the moment so your cash isa is just going down unlwss you’re on a decent rate and even then, the real inflation number is way higher than 3%. Govt artificially suppresses it with nonsense basket items.

anyway. I’d rather take the risk and be a millionaire in 40y rather than £60k in cash that didn’t go anywhere. Maybe just kept up with inflation… but that’s a completely different outcome. It’s why some people are rich and others aren’t 😞

Alternatively, she could put it all as a house deposit and get a small mortgage for the rest. Then not claim benefits.

I hate that. The lower paid jobs have to be filled, and they are often vital too. What would we do if everyone left them to get better jobs?
I used to be a hospital porter. I lived alone in decent flat. Had enough for rent, bills, and everything else I wanted. It was NMW.
Nowadays, even a couple on NMW struggle.
Why are you blaming people in the jobs that NEED doing, for not bettering themselves. No one in full time work should need UC top ups... It is the cost of soaring bills and rents that means they can't afford to live... not them staying in the jobs they might actually like (I say that as I loved my job).

It’s true. CEO pay is 300 times more than minimum salary nor on average. It used to be 40 times. Fat cats got fatter and the gov picks up the bill of poorly paid people, subsiding their lives bevsyse they can’t afford to live on their tiny wages. It’s a joke. Public purse is empty, in massive debt yet private wealth has ballooned and the gap is only getting larger.

Yes and it's that easy isn't it. Work longer hours. Get a degree. How can you work longer hours in a school - where you are probably employed on a term time contract?

"these people". Did you miss the part where I said above that a single person on UC gets just over 400 pounds a month?

People on benefits aren't the underclass. There are lots of reasons why people need Uc. Disability. Disabled kids. Employers not paying enough wages.

Work longer. What does that even mean.

Yep, and the people in the vital and poorly paid jobs get blamed and told to try harder.
It pisses me off so much.

If people want to look down their noses on people on benefits like a bad smell - that's up to them. But spare me the work longer or just get a better paid job trope. If it were that easy no one would be unemployed

Yep, full time NMW should not mean being topped up. That is the fault of the cost of bills and rent... yet it all gets put on the person who might be trying their best.

So many people on here said OP's friend has money so can just do OU/get a degree.
For some people, all the money in the world wont make someone more academic, or able to study. OP said her friend has basic GCSE grades. What makes anyone think that she could just do a degree, like it is that easy. I tried a few times.

If she is on benefits she has to declare this as capital as soon as it's in her bank, & her benefits will be stopped anyway (any savings over £16k end entitlement to UC / any other means tested benefits).
If she doesn't declare it then it's outright fraud, & with that amount it could have severe (criminal) repercussions.
If she does declare it, then tries to reclaim benefits once it's all gone, she needs to be aware that she may not be entitled as it could be seen as deprivation of capital, if she 'spaffs' it away - she would be required to show proof of where that amount of money went.
As mentioned above - she really needs expert financial advice. (You can have a mortgage while on benefits, & after approx 3 months may even be entitled to a repayable loan to help with the mortgage interest, although not the mortgage itself - but she needs to do this in the legal way). Sounds like you are right & she is very wrong - probably a once in a lifetime chance, & she is planning to throw it away?

@Sogfree

My friend is on benefits as a single mum, and had a similar dilemma.

Her divorce had finally come through, and her portion of their assets was £115K.

She took my advice and looked into shared ownership, and let the benefits office know she was on the list for a place, so she was given 6-12 months grace to use the money before it was counted.

£110K was enough to put down as a 25% share on a lovely house, and the benefits still cover the rental part, so she's no worse off in that way, and she will now have an asset once her dc are grown and she no longer receives benefits for them.

As for the benefits office, they're better off too, as instead of paying £1500pcm in rent, they are now only paying £900 pm in rent for the shares she doesn't own, and as her money was enough to pay that 25% in full including solicitor fees, etc, she didn't require a mortgage so she's also no worse off from a monetary pov, and actually, as I said earlier, she'll be better off because she'll have an asset for the future.

The whole process to finding somewhere, buying it and moving took around 7 months, but she got accepted for the 1st place she looked at, so it could take longer.

Good luck.

Agree, but with respect, benefits are there for good reason, (I have had to claim myself in the past), but this thread is about someone who has apparently just won £125k, & just wants to spend / 'spaff' it all in order to remain on benefits.

If she moved here…… £125k wouldn’t buy a house outright but would only be 30k short of some of the options. I know you said her mother is nearby at and needs her but if I were her Id still look into moving.

You can't just give the money to your children, it's still deprivation of assets. People have become unstuck by this. Money in a child's bank account doesn't count if it has come from someone else, or was deposited before you could have known that you would need to claim means tested benefits.

Shared ownership if living in an area with cheaper options would work. She needs an honest conversation with her Mum, house sharing might be the way to go. She has to prioritise her children.

She can't do that.

She will be expected, by the DWP, to use the money to live on. If she puts in in her children's names, it will be seen as deprivation of capital, and she will be treated as if she still has the money to live on.

Using it to buy property is her only option, really. And even that would need to go to a decision maker at the DWP; it's not a cast-iron guarantee it wouldn't be seen as deprivation of capital.