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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To wonder what to do with the money

103 replies

Quandary2018 · 12/08/2019 21:09

Parents have very generously gifted me 25k which, while a substantial sum of money, is not enough for me to use as a deposit on a house as I’m a single parent who works part time and I simply don’t earn enough to get a mortgage so- what do I do with the money?
Am thinking maybe some savings for the kids and a holiday but that seems wasteful so what would you do with 25k that isn’t mortgage related

OP posts:
GreyGardens88 · 12/08/2019 22:34

If you put it in savings 25% of its value will be wiped out by no deal brexit anyway, spend it whilst you can

TheFlis12345 · 12/08/2019 22:35

Are you understanding how shared ownership works? If the house is £260k then you could buy a 25% share of it, so wi a £25k deposit you would need a mortgage for less than £40k.

Original poster
Quandary2018 · 12/08/2019 22:38

I understand how it works but the scheme running on the nearest development doesn’t appear to offer a percentage share rather it’s a share of equity so you get a loan from the government towards it so would still need a mortgage over what I can get

OP posts:
Original poster
Quandary2018 · 12/08/2019 22:40

I do realise that is totally different from shared ownership but the equity loan is the only option on the nearest development to where we live now

OP posts:
TheFlis12345 · 12/08/2019 22:41

Weird, that sounds more like Help to buy than Shared Ownership, the latter should always offer a % option, that's the whole point of the scheme.

TheFlis12345 · 12/08/2019 22:43

Ah ok, so based on your second post that is Help to Buy. Shared Ownership schemes are becoming more and more common. They are often advertised off plan in local papers so worth keeping an eye out for.

SirVixofVixHall · 12/08/2019 22:58

Two of my friends have bought flats in London through shared ownership, neither had a huge deposit, and they now have lovely flats in areas where property prices have increased hugely.

Wowserme · 12/08/2019 23:12

Premium bonds is a good option x

fuzzyduck1 · 12/08/2019 23:14

Invest in Freddie’s.
They have increased in value over the last 20 years more than even houses.

The price increase has been 200% on a Freddy
Where in the same period houses have only gone up 133%

So looking ahead £20k of freddos will be worth £60k in 20 years and no bank account will grow your money like that.

ThePants999 · 12/08/2019 23:31

To everyone saying "premium bonds are a good option" - no they're bloody not. www.telegraph.co.uk/investing/bonds/martin-lewis-this-is-why-you-should-dump-premium-bonds/

Ginger1982 · 12/08/2019 23:36

Have your parents expressed what they'd like you to do with it?
Could they set up a trust for your kids? My grandparents did that for me many years ago.

Speakercube · 12/08/2019 23:53

Could you open up accounts for your children and pop the money in there for now so that it doesn't affect your benefits? Or buy premium bonds for them and then you might get some good returns like others have said?

Nancydrawn · 12/08/2019 23:58

Is there a particular reason/occasion for the gift, OP? If not, I'd ask my parents to hold onto it in their own funds for now, with the expectation that they'd be able to gift it to you when you're in a better position to use it effectively and efficiently. It's not a sensible gift when it's going to have such a big impact on your income without actually providing much in the way of material benefit.

Even if you're of the mind that family should help family get off of benefits (not my style, but some people's), it's still a short gain for a long-term loss. In a few years, you'll be able to work full time, get a reasonable mortgage, and with luck use the deposit to get off benefits for the long term. If you get it now, it will merely give a short-term reduction in benefits without providing a means to get off them in the longterm. Again, I don't think this is particularly material, but if you're hearing about this from others, this is a reasonable answer.

Alternately, if you're comfortable with it and could make a sizable salary with your current qualifications, you could ask your parents to pay for childcare while you get back to work full-time. You can get back on the career ladder, with the hope of building up your salary by the time your kids are no longer in childcare, and there might be money left to help with a deposit.

But no, I don't think the lump sum cheque is a good plan at the moment.

Anychance123 · 13/08/2019 00:00

I’ve got 10k in premium bonds, I have won £100 since January. It might not be amazing but it’s secure, better than a bank account and accessible. You can put them in your children’s names too but access them when you want. I would keep the money there until you are a more mortageable.

RubbingHimSourly · 13/08/2019 00:03

Hoard it. One day you may be able to get a mortgage. Put it in a high interest account and don't touch it.

kateandme · 13/08/2019 00:03

lie on the floor and cry in relief...sorry not helpful Blush

C8H10N4O2 · 13/08/2019 00:03

If its really not usable toward property can you ask them to put it in trust for the DC instead? Or use toward a pension?

lyralalala · 13/08/2019 00:08

You said 'give them it back' - have your parents already given you the money? Is it in your bank?

If it is don't give it back - if it's already there you'll have to declare it and use it to replace benefits. Giving it back will be depriving yourself of it

TheInebriati · 13/08/2019 00:11

Quandary2018 Be very careful about buying in to your HA home, you may become liable for buildings insurance and all repairs.

I don't think your parents meant to leave you worse off, so ask them to reduce the gift to £5,000, which is under the saving limit and shouldn't affect your benefits. Keep it as rainy day money, and ask them to keep the rest for you for emergencies.

HopelessLayout · 13/08/2019 00:32

Where are all these high-interest savings accounts that people keep suggesting?

TheInebriati · 13/08/2019 00:40

In the 1990's Grin

SunniDay · 13/08/2019 00:40

Hi,
If it were me I would like to use it to give my children opportunities that I couldn’t otherwise afford.

I would ask my parents to put it into a ring fenced account for my family (but in their names because of the benefits issue) and then ask them to use it to subsidise as and when needed for example clubs and activities, school trips and camps, kids/teenagers clothes if I was under pressure, a modest holiday when needed. If I could make the money stretch far enough help with driving lessons/rental deposit for house at uni while awaiting student loan etc.

Your parents could be asked to pay direct or give you a little cash to pay for these things. It’s not unusual for grandparents to pay for these type of things so I don’t think it’s immoral.

If you have a child just starting secondary you could probably do with the money lasting 10 years plus so you would need to be budgeting to only use around 2k each year to make it last but 2k for the kids could make a big difference to what you can do for them.

I imagine your parents might enjoy seeing their money enhance the opportunities their grand children have.

Purpleartichoke · 13/08/2019 00:48

I’d look into some sort of trust or long term investment that sets the money aside for you, but doesn’t give you access for many years. I’m in a different legal area, but where I am, your parents could deposit it directly into education or retirement savings funds for you. They could also set up a trust that prevents you from accessing the money for several years.

Legawein · 13/08/2019 00:54

@Quandary2018 me and DH found the shared ownership house we are currently in the process of buying on rightmove. Wasn't advertised on the help to buy website. Might be worth a look on places like that?

Original poster
Quandary2018 · 13/08/2019 07:06

I’ve trawled through all the main house selling websites as well as the shared ownership agents site and there’s nothing in my area- there’s been 2 new housing developments built but the properties are all sold.
As I said, I can’t move away partially because of but also because, after some very up and down years, my kids are settled and happy. I know kids are resilient etc but my ds has struggled with his mental health and now that he’s finally ok I don’t want to unsettle him

Parents have said they’ve given us the money because life is short and they wanted to help us now but no specific thoughts on what it should be spent on

I’ll have to talk to them about whether they could hang on to it and give it to me in dribs and drabs instead of a lump sum

OP posts: