what on earth to do with inheritence?

[marymaryquitecontraryusedtobeafairy]

I've been left a house which to sell now would bring me about 80K in the bank.

I'm poor. I bring in about 24K/year, and am in masses of debt. I just survive. I'm a mum and I work and get benefit top ups. I'm council housed in a dire part of the country, the house is in a slightly better area but I don't wish to uproot myself and children from school and home.

What do I do? Can this help me get out of the poverty trap? Do I live off the money? Live in the house and enjoy a secure home but remain in poverty? I can't afford to do the house up but can I possibly buy a very cheap or auction place, do that up and start flipping houses as my main income?

Look I'm not that bright but I've worked hard all my life and it's just not good enough financially. I decided to be a care worker because I enjoy it but the pay alongside the increase in prices has crippled me and there's no way to get out of it so I just trudge on day by day. I'm not miserable nor are my children but I don't want to waste this opportunity.

I don't have money for a financial advisor right now nor time to research so I'm hoping you clever and wealthy lot can help me out a bit with pointing me in the right direction.

Thank you.

Pay off your debts as a first step I would have thought. xx

My advice would be to pay off your debts and to use the remainder to retrain in a profession that will let you live sustainably.

Can you rent it out for income? Of course if you do it will most likely affect any UC you receive? Or sell and put on trust for your kids.

I would probably sell it and pay off the debts then think about what I was going to do with what was left and no debt

Always get rid of debt as your first move.

How much of the £80l will you have left if you clear the debts?

If you are in a council house you are probably in a good position house wise even in a poor area.

Tbh I would work towards move. No rent would allow for better debt repayment and you could look into bit better paid job.

How big are your debts?

Pay off all your debts first. How much are they?

If you end up with £80k then I think your benefits will be stopped until you have less than £15k? or is it £6k?

You already have the security of social housing so I would think VERY carefully before giving that up.

I would then put the rest of the money in a savings account, transferring a set amount each month to your own account, and use it to pay for something for you and the kids each week e.g. a club or activity.

Life is for living after all.

You could also use the remainder after paying your debt to buy a property. £24k a year means you can borrow about £75k. You'd need to check your credit rating and speak to a broker about a mortgage. Home ownership is expensive though so you'd have to talk through the figures with someone to make sure it was feasible for the long term.

What benefits do you receive ? Once the property comes into your possession you will need to declare it. If claiming UC then benefits may stop or the property could be disregarded until sold . It could put you in a difficult situation with your benefits, although I'm not sure on the rules for tax credits because if you sell it you could lose benefits ( if on UC ) and if you keep it to rent out you will also lose benefits. The best bet might be to live in it but I appreciate you don't want to uproot your family. It really all depends what benefits you receive. Even if you are on Tax credits, everyone will be switching to UC in the next year or so and savings over 16k would only be protected for a year. I guess one option maybe to sell the house and put that money into maybe a shared ownership property if that is an option, that way you could keep the money as it's being put into buying a home you will be living in.

I'd move if the area is better, children move schools all the time. Having no rent to pay will free up some income to reduce to your debts.

What size debt and what interest rate are you paying on it?

Size of debt is probably the deciding factor, big difference between £5k-£10k and £30k

I should also add, for benefits purposes debts can be paid off without it being seen as depriving yourself of capital.

I wonder if CAB could help advise the implications to benefits etc. with the different options?

You say you can't afford to do it up, but how essential is the work? Is it structural, or is it mainly cosmetic? If it's cosmetic, you might be able to a find cheap (if temporary) solutions to make it more homely in the short term - paint, throws etc.

My gut feeling would be to live in the house as long as council tax / utilities aren't too hefty. Not paying rent may mean you can pay off debts / start saving.

Depends on various things.

How much debt you have.
How old are you?
Do you want to move either locally or further afield?
Are you happy in your job or is there something else you could do if you retrained?

It is a lot of money but not really life changing so take your time to think about priorities

This is not making sense unless the debts are very close to the 80k or on REALLY high interest imho.
Plus with dependants, it would not be 75k really. So selling, the buying in probably higher price and interest would just mean OP lost money?

Pay off your debts .
Invest in yourself to train for a higher paid job in the same field you enjoy .
Put 20k in an ISA.

sell the house

pay your debts

put any remaining money in an ISA

sign up to money-management courses to learn to manage your money and not get in debt again. Look at the Martin Lewis website.

when those are done and if you have £30K safely in the ISA, then start making a long term plan of how you can best use the money.

I'd move. The security of a permanent home, rent free, cannot be underestimated, particularly when you have children. Plus you have the asset, so you have something with value should you ever need it.

You will always need a home. Why pay years of rent for something you will never own, when you can own one without paying anything for it.

Use your rent money to pay off your debts.

Is the house you’re left mortgage free and suitable for you and your family size to live in. If it is then I’ll move there and own a home.
That way, you’ll still be eligible for benefits except rent aspect if you currently get this as you won’t be over the savings threshold.
Then, the funds you’ll normally use to pay for your rent, start using it to pay your debts till you pay it off and just live within your means.

Pay the debts first then begin rebuilding your credit score.

How much of your salary are you spending on paying interest on debt?

It's all about doing the maths.

So write down all the different scenarios, what you gain and what you lose with each.

Paying off debts is the most important thing. Then you either invest the rest and use the interest to top up your income or use it to buy somewhere to live or a longer term investment ( e.g. a pensio, an ISA)

I certainly wouldn't be putting it in a trust for your children, you should use it to improve your life now.

Have a look on Money Saving Expert forums- there is lots of great advice there.

@Tohaveandtohold males good points.

Look info this.

We did most of our house on the reduced paint and free furniture trim free cycle topped up by ikea