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.

What you mean is that she wants her cake and to eat it also? She wants to stay on benefits despite being far far more financially secure

No.

If you are benefits, some small win like a couple of £k can buy you treats and a holiday. A win like a few £million will be amazing and life changing.
Something like £125k... not enough to buy a house, so you have to live off it. If you are on benefits, get a sum like £125k, you are expected to live off it like you are still on benefits. No nice treats. You have to account for everything.
Spend it all, and if you are deemed to have been a bit extravagant, you wont be allowed UC again. A win like that means you don't claim benefits for a while, but you don't get anything nice out of it. All that happens is the government saves money.

It is a shitty trap.

And she only works 1 day per week, earning around £650-700 a month, but as she paid her share in full, she didn't need a mortgage.

She could've got one as she looked into it and they take benefits into account.

Her total net income was around £48K at the time, and the mortgage advisor said she could realistically look at properties around £240K, but shared ownership made more sense as it was then a one off payment with no monthly mortgage needing to be considered, as benefits won't pay towards a mortgage, but they will and do cover her rental share.

I saw a TV programme years ago where benefits recipients were gifted £20K in return for signing off benefits and seeing if they could use the money to start an independent life. I can't remember all the stories but one family started a themed party business and used the money to buy loads of reptiles and party supplies. Another lady bought a market stall and stock. A couple bought a van to run an odd jobs kind of business. They were all able to make their chosen businesses pay and stay off benefits. Your friend has 6 times that amount of money (okay, less in real terms because of inflation). It's a massive opportunity to come off benefits. She'd be crazy to waste it.

That sounds interesting. Can you remember what it was called?

Just googled it - Great British Benefits Handout

Thanks.
From what you have said, they all did better with the money and helped themselves.

I’m sure if she buys a house it’s not seen as deprivation of capital And therefore should still be eligible for benefits

This is really confusing

why would she assume her continued source of income is benefits in the future

it’s just common sense that this win, is what she needs to live off ie not spend all at once to continue claiming benefits

most people with a £125k windfall would use that to better their situation not continue it

in any case, spending £125k at once to keep benefits would likely be deemed fraudulent by DWP. They do monitor capital and their fraud teams can gain request access to your bank account data (to the bank directly ie without your consent, if you are subject to an investigation).

Yep, buying a house isn't DoC. But she might not be able to get one on the money she has.

If you are on UC, you can use a windfall to buy property or pay off debts.

When my marriage ended and my ex stopped paying the mortgage DHSS took over the interest payments only. They are paying her rent where she is so it doesn't make much difference to them. I retrained in order to get off benefits and be able to pay the capital off the mortgage. It can be done!

Clearly the friend doesn't want to do anything good with the £ cos she'd loose her benefits. Wtf

If she does that she won’t get any UC at all. It still counts as savings if it’s in a house.

what’s her mortgage capacity? She might be able to buy if she’s not south east. And the mortgage likely would be better than rent, even without the housing element of UC.

The issue is partly the benefits trap. And wages actually being too low.

Shes probably hitting the benefits cap of £1800 a month. £400 for her, £300 each child and housing element.

Some full time on NMW will get roughly £2k a month remove, pensions contributions, income tax and NI. And your not much more than the £1800 a month benefits cap. Come off UC and you loose 85% of childcare paid too. And there is costs getting to work, commuting and suitable clothes.

£125k is what some people would earn in a year. Its 5 years of money for her but she is limited in what she can do with it.

Ideally she'd be wise to invest it in a house but then she'll lose the Housing Element of UC.
Yes in theory she could be just as well off working Full-time on NMW and pay a mortgage but that's easier said than done. There isn't a huge number of NMW jobs that are 9-5 Monday to Friday. Getting childcare for anti-social hours is almost impossible unless she has family.
So say she gets a job relying on grandparents to babysit. Thats another sacrifice on her.

She's unlikely to be able to buy a house out right on £125k so would need a mortgage to fund the rest.
Even a smallish mortgage would make money tight little margin for the maintenance costs that come with home ownership.
Anything goes wrong with the job, redundancy, sickness or something and she'd really struggle on UC without the Housing Element.

Then I'll be a real miserable git. She's worked her ass of to get a house paid off so she has something to leave her kids.
Gets dementia needs a care home and its "Iff you've got your own place, pay your own care"

So what was the point? When she could have spent differently

It would be seen as an asset so she would lose her benefits. Because I had no mortgage on my house when I was temporarily without work, I was told I wasn't entitled to anything because the house was classed as an asset, despite having no other means of income.

You need to be careful calling Trump a rapist. He has never been convicted of rape. He was convicted of sexual abuse. The law is different to the UK. Dont want you getting into trouble, these days you must be careful...

The point is it's her job to pay for her life and her children.

....and yes, we typically lose our houses at end of life to pay for our care, because once again, it's up to us to fund our own lives.

If we don't all fund our own lives then a) Our neighbours have to fund our lives b) A lot of people just don't bother to pay their own way and you end up like East Germany back in the day which is pretty much were we are: Gazillions of people taking out and a dwindling number of people paying in and that dwindling number under increasing pressure to the point where they also think "What's the point" and emigrate, go part time, work for cash or go on benefits themselves.

In the same way that if you earn £40,000.in a job this year you have to blow it all on food, accommodation. The taxpayers don't club together and pay your living costs and let you put that £40,000 in a good investment or something more useful.

Sucks, doesn't it. But we've all got used to it.

Considering a large proportion of people on here seemingly think that £125000 isn’t enough to live on for a year, it’s amazing that people are expecting this woman to live off it for the rest of her life.

So if she does decide to invest it in a property if she can find a suitable shared ownership place what you're saying is that some managers may see this as deprivation of capital and others won't.

There's no clear cut rules at DWP on this?! It's up to how generous/mean someone interprets deprivation of capital?

So she may go through all the stress of buying a property, arranging a mortgage, moving etc to find she can't fund it due to her advice before buying from one manager saying go ahead and the person whose desk it lands on after purchase seeing it as deprivation of capital and refusing her wage top up benefits.

Ludicrous.

Sounds interesting. Thank you.

I did initially raise her starting a business with the money, but her self esteem and confidence is so low from not having her Maths GCSE and feeling looked down upon for so long by society - this thread being a great example of that.

She's also scared to give up her full time job, as she's worried she might not be able to get another if the business fails. She loves her job and she believes it's an important model to show her children.

I'll do some digging about that programme. It might be enough to help her be less dismissive of the idea. Thanks.

But she should be able to afford it. £125k is a huge chunk of money to put down towards the deposit. Even half of that is a massive. As many PPs have said In the shared ownership she will still receive the rent element not the mortage part. A lot of people receive UC and pay a mortgage i don't see why your friend can't do the same. Or buy a suitable house usimg the majority of the £125,k with just a small affordable mortgage.

Could she not afford it? You said in your OP not buying a property with the money meant she lost out on a chance at having a life free from benefits

You can own property, I’m a single Mum and have my own house with a mortgage and I claimed UC whilst working part time too. Why does she think she can’t?