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.

Poor thing…..

And on the savings for children point - money held wholly for children, in an account in their name, which can be traced to coming from a source which intended it for them - that's exempt. But not all uc advisors are aware of this so you need to quote the specific guidelines ime

But in this case it would be deprivation of assets so she could continue to claim benefits (check out hmrc guidelines around cash gifting though - she can give away £3,000 cash a year before needing to pay tax on the disposal)

I know someone who won a million on a scratchy. Still in her council house. I have no idea what she does with the money.

Don be sad. The woman is an absolute wally.

she had the opportunity to build wealth and couldn’t work out how to live without the taxpayer. This is what people mean by generational dependency

Why should she still claim benefits if she has £125k? Surely she should save the taxpayers' money and live off it? And not by 'spaffing' it but by being sensible. You might not have started a benefit-bashing thread but it's definitely a shit-stirring one!

I'm just waiting for someone to say they are surprised the OP's friend, with 3 children and claiming benefits, could afford a minimum of £12.50 a month for a postcode lottery ticket . . . . .

Ridiculous.

there are so many ways in which she could use this money to improve her situation.

please advise her to see a financial advisor rather than be irresponsible

THe SMI is only for a short time I think? In any case, they don't give you the interest, they put a charge on your house for if you sell it. I didn't claim it for that reason when I was on benefits.

She's an absolute fool to spunk it all and not secure her future with the ££. You should be happy, not sad. She has choices now! Of course benefits shouldn't be paid to people who can support themselves.

Best options imo either:

• look into shared ownership
• take time off work to retrain to a higher paying profession

I have several takeaways from this.
It's sad that someone is working but still needs to claim benefits to survive.
Some people who are not born of money or have never had much don't know what to do with it. This is not being thick, it's just not been a factor that has been learnt as a life skill.
She needs financial advice.
Please tell her what has been said about deprivation of assets.
I agree with trying to train in something that will help her income.
Perhaps she could get a care assessment for her mum to free up some time. Perhaps she's feeling overwhelmed because of her caring responsibilities and needs time to unravel the possibilities.
You can always rely on some on MN to resort to nastiness rather than understanding.

No it's not wrong. Everything provided by the taxpayer while she sits on her £125k. She has a good deposit for a house now.

She needs to use that money wisely.

look for local properties to buy though with £125k and being a TA on benefits this might not be the best use of the funds as losing the house later due to not being able to pay the mortgage/upkeep without also trying to improve job situation would be likely

mapping out a budget of where to put this money would someone experienced, a financial advisor would be money well spent.

personally I’d look at in no particular order -

retrain or upskill to get better pay. This could be a set of day courses, open university degree, discussing with her employer about further in work qualifications to get a better paid position. Use the entire fund for 3/4years at university to gain a quality degree. That money would be enough get a degree and QTS for example if she wished to stay in the education sector of course she needs to be academically able to do so.

use it as a buffer to switch jobs to something that pays more. She’ll have the funds to get good childcare whilst doing a new job. The money would be giving her that much needed hand up to cover upfront childcare costs that others in her situation struggle with.

put a chunk of it into a private pension as this alongside her existing LGPS won’t be take into account by DWP as it is a pension. (Double check though)

open a savings account and drop 6k in as an emergency fund as this is what the savings limit is before UC taper starts.

pay off any debts and get bills where possible and appropriate a month or so ahead and keep them ahead.

replace anything that needs to be replaced. NEED not want OR things that would improve her life eg a dishwasher or tumble dryer.

my first big chunk of backdated benefits (I was a carer to a disabled child) I bought a dishwasher, larger fridge and tumble dryer. this improved our lives massively as I was able to shop for food less often - I only had a camping fridge- actually deal with bed wetting without it taking all day and not spend hours cleaning every day. This made it possible for me to retrain in my spare time as I finally had some and then enter the workforce as DC grew older.

if I had 125k right now my first stop would be to pay off any debts owed and budget accordingly for a second degree, my outgoings and rent for the 4years I’d need and the degree fees as well as replace the clutch/gearbox on my car as it’s fab, cheap to run and insure. I know the area I’m currently training in is short of worker and there’s plenty of jobs.

this is what she needs to do but appropriate to her situation . Big picture but also small life improvements that would really improve things and not spaff it up the wall on crap. She should also keep receipts for everything so she can prove it’s not wasted.

It’s funny that so many people are insisting this is just a “benefits bashing” post while multiple other people are confirming this is exactly how some people think.

its the reason so many lottery winners go bankrupt.

Some people are just terrible with money and they don’t really and truly want the responsibility of it, so they try to get rid of it as fast as possible

Quite. Ridiculous.

That would be deprivation of capital and she would still be deemed to have £125000 pounds as notional capital.

Spending it as fast as possible will be seen as deprivation of assets- she’ll be asked to show where that money has gone and if they think she’s “spaffed it” it’ll impact her benefits anyway.

Her benefits won’t stop she just won’t get help paying the mortgage. 125k is a healthy amount to put down as a deposit so her mortgage should be small depending on area, or as another poster said shared ownership is a good option.

She has 3 children
Split it 3 ways in to trust fund / ISA in their own names once she has bought a better car, decorated etc and it's all taken care of.
Why is she choosing to frivolously spend it & not think of their future?
This opportunity won't come around again for her or them.

This is such an excellent answer

Would she consider shared ownership?
Winnings to buy the share and then if entitled, housing benefit to help with the rent side.

You both sound like spongers tbh.

Why would she need to be on benefits if she has £125k? I would have thought that puts her over the savings threshold for most benefits except child benefit?

Surely the sensible thing would be for her to work out how much she needs to live off and then put the rest into savings and investments. Then if her circumstances change in the future, she reapplies for benefits as and when she needs to. £125k would be enough to buy a house outright in some areas. Could she not do that and rent it out, then in the future, if it's increased in value it could potentially be sold to buy a house outright in the area she wants to live.

We were in a simular position a few years ago. Only it was inheritance. We live in a council house and have 2 high school age kids. I work just above minimum wage, and hubby gets some pip. I've gone from 35 to 40 hours by getting a little 2nd job. It did feel a bit meh at first but we do treat ourself to a yearly holiday with the money, that'd we would have strugglednto afford otherwise. I also learnt to drive and we now have a car(a small economical one). It's nice feeling being in control, rather than worrying about dealing with UC etc. We arent blowing it all though. Our kids are 16 and 11 and it should last us another 15 years at least. We are in our mid to late forties and really wanted to buy but we just didn't have enough and only 20 odd years for a very small mortgage.

she has just won £125k. That is more money than almost of people could dream about. She therefore should no longer be claiming benefits. Entitled to the extreme.

Is this rage bait??

Do the benefits people allow people to spunk £125k up the wall and then crack on giving them benefits to replace it??

Such a ridiculous thing to do. She could at least do part ownership and then she’d have lower rent costs and a stable place to live with the chance to buy the rest if she’s ever in a better financial situation when the kids are older.