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.

I think that giving some to her kids will go against her when it comes to UC. They'll expect her to use it as daily living for a few years until she's whittled it down to under 16k. It's a pity as £125k should be a solid deposit and solve a lot of her problems going forward.

You can have a mortgage on UC (I did) you just can't have help towards it.

She is allowed to own a property. She’ll lose the housing allowance for her rent but she can own property. Depending on where she is she might get quite a bit for her money. Where I am £125k would go a good way to a 3 bed and she takes out a mortgage based on her salary to cover the rest. She’ll need to budget, but don’t we all.

I would put the max into junior isas straight aeay for the kids.
Then she could set up a ltd company and buy a property through that to rent out. Putting the money back into the company. Would provide a nice nest egg for ehrn the kids are a bit older she can go back to work and then close the business and buy something.
She could also fund a business venture
She could buy gold and keeo as an asset again until kids are older and she returns to work.
My aunt had a similar windfall as a single patent with 4 kids.. she did spend it all. Did not and still does not want to ever own a house. Shes quite happy working full time at tescos and living in her council house. She just never wanted to change her situation. Some people are just happy as they are.

‘Limited sympathy’? Why any sympathy at all?

She can't save much for the kids. UC will pick up on it when they go through her bank statements.

She definitely can use it to put a deposit down on a house. She then just needs to prove she can pay the mortgage back- would probably benefit from talking to a mortgage broker

She needs to be very careful before she wastes the money. She won't be entitled to claim benefits unless she can demonstrate that the money was spent for necessities and not wasted. I know someone who sold her house and gave the money to her son to buy a house and start a business. She then tried to claim benefits and get a council flat. She wasn't entitled to either.

Definitely shared ownership. You can buy 25% and that would go along way even in outer London.
If your friend is working and has top up benefits she will probably get help with the rent element. I'd caution her not to blow this. It's life changing.
When her children are older perhaps she can improve her qualifications. It's all possible.
We live within an hour of London and the three beds are £300-350k ish shared ownership.

Quite. She's been a very fortunate woman.

This is absolute nonsense. I hope she’s put £1,000 of it aside to see a good financial advisor.

Lol, why do you feel sorry for her? She's just won an eighth of a million. That's an incredible amount of money.

If she chooses to chuck it down the drain, that's on her. As a pp said, why should she remain on benefits with that amount of money? Although it sounds as if she will do exactly that.

I think this explains why she is poor in the first place.

She could buy a house in some locations for £125k. She could work as a teaching assistant anywhere in the UK and still get UC top up.

Of course you can own a property and be claiming benefits - child benefit is one claimed by millions of home-owning households.

She can get a small mortgage with her TA salary. Some lenders will use a limited amount of CMS if it's done through the right channels.

Note - I borrowed £85k against a similar deposit 10 years ago whilst working PT in a school as a receptionist). She can apply for shared ownership properties.

Spaffing £125k is utterly reckless behaviour when she can use it to invest in a better future for her and her kids

Oh so tragic. She will have to spaff it up the wall while other working age people get to continue paying her benefits without any prospect of staffing money whatsoever.

She should go and see a financial advisor as there are many options. I realise that being on some benefits means you can’t have more than £6k in savings and continue to receive benefits so she probably is worried, but spending it unwisely isn’t a good idea. In the short term it would be best to put it into her kid(s) bank account.

However - and this will be a contentious view - the ideal would be for her to be able to receive the benefits whilst she arranges either a full time job and mortgage, or sorts a part ownership. IMO it is a shame that people can win or inherit a sum that COULD change their life and mean they no longer need additional benefits, but having to meet all their own housing costs whilst arranging everything eats in to the capital massively often leaving an insufficient amount to make the changes! It’s a Catch 22. Surely the long term gain of being permanently off benefits is better for everyone, so being able to keep the £125k AND benefits for a while would help.

She no longer needs benefits. She has £125k. She may still be entitled to something.

When she had nothing, she needed and received benefits and rightly so. Now she does not need the help but someone else does. I honestly cannot believe what I am reading.

She should put it away for her children so they have a bright future.

Someone who has won that much money should not get benefits. End of. Your friend is an idiot by the way.

I agree, it's utterly ridiculous.

Theres 25 in stocktonupon tees
https://www.rightmove.co.uk/property-for-sale/map.html?minBedrooms=3&maxBedrooms=3&sortType=2&minPrice=100000&areaSizeUnit=sqft&viewType=MAP&channel=BUY&index=0&maxPrice=125000&locationIdentifier=REGION%5E1270&numberOfPropertiesPerPage=47&transactionType=BUY&displayLocationIdentifier=undefined

Do savings for children not count towards the £16k savings threshold? And if she does that, doesn't that count against her as deprivation of capital?

Do you know what...?
I wouldnt know.

Because I'm a net contributor and dont rely on hand outs from the government amd taxpayers which I then spend on gambling ( like the postcode lottery!) 🤷🏻‍♀️

Ok @Sogfree your friend needs to show down here

There's a couple of really wrong things here

1. She can't claim UC after a lottery win as she'll have savings over £16,000

1. If she gets it, spaffs the lot unwisely so she can get below the £16,000 threshold again it may impact when she can claim again. There's rules around this and they can deny a UC claim in these circumstances. For example, while on UC I sold a house and received a lump sum, and I had to show that the proceeds were going to pay off debts and provide copies of the bills etc. Ie they knew I had a big sum of money coming in, and they wanted to check that I had disposed of it wisely in light of my claim

1. I suggest she speaks to her UC advisor saying that she wants to use the lump sum towards a house.

1. Of course you can pay a mortgage while on UC although it might be trickier with the whole 'buying a house while in UC' as she'll have a lump sum that's more than the amount of savings that you're allowed under UC.

There are lots of places in the country where you can buy a property for 125k outright. She would need to move to those places if she doesnt already live there but given that she is a TA and this is an indemand job she is likely to get a new job very quickly

She has the whole summer to make arrangements.

Boring.

She needs urgent financial advice, which the Postcode Lottery should be able to help with.

DWP may stop her UC if she blows it all rather than live off it.

Shared ownership may be an option.