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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

what on earth to do with inheritence?

551 replies

marymaryquitecontraryusedtobeafairy · 30/07/2023 11:02

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.

OP posts:
Thread gallery
8
gemstoneju · 30/07/2023 18:37

Don't understand how you can be getting full help with rent as your income is £24K, or does this include benefits and child maintenance?

If you live in the house you've inherited, you will never need to worry about rent again. People have to work into their mid-sixties now, it's a long grind just to pay rent on a house you don't own. Also the bedroom tax when and if your kids depart - you may be 'encourage' to move anyway.

crazymare20 · 30/07/2023 18:40

Sell the house, pay off your debts and buy your council house. Depending on how long you have been living there and the house price you may be able to buy your house outright.

Babyroobs · 30/07/2023 18:50

gemstoneju · 30/07/2023 18:37

Don't understand how you can be getting full help with rent as your income is £24K, or does this include benefits and child maintenance?

If you live in the house you've inherited, you will never need to worry about rent again. People have to work into their mid-sixties now, it's a long grind just to pay rent on a house you don't own. Also the bedroom tax when and if your kids depart - you may be 'encourage' to move anyway.

Op will not be getting full help with rent. She gets Universal credit which will be paying her a rent element equal to her full rent because it is social housing. But then her whole UC award will be greatly reduced by her earnings, including rent element . This is the way a UC claim works.

gemstoneju · 30/07/2023 18:58

Thanks @Babyroobs for explaining. So as her kids leave education over the years, and/or her earnings rise, I assume the overall UC amount reduces. Either way I believe she'd be best off with no housing costs to worry about.

Warszawa · 30/07/2023 18:59

Flicked through your responses and if I read right

the house is 3 bedrooms, structurally sound. That's a good start.

personally if I were in your shoes I would move into the house, rent out spare room(s) that should keep you ticking over until you can find a job. It shouldn't take too long to clear the debts as you are in a position of no rent/mortgage. Maybe 2 years ?

then debt free in a couple of years you can re assess how much the house is worth then and decide if you want to move.

I think if you sell it the cash will dwindle, and whatever caused you to get into debt in the first place may well happen again ?

it's a blessing so use it for your benefit - to break out of the chain you should retain it as an asset - breaking a cycle of poverty is a mind set shift and won't happen over night.

all babe best to you whatever you decide to do :)

Warszawa · 30/07/2023 18:59

All the best even :)

Babyroobs · 30/07/2023 19:01

gemstoneju · 30/07/2023 18:58

Thanks @Babyroobs for explaining. So as her kids leave education over the years, and/or her earnings rise, I assume the overall UC amount reduces. Either way I believe she'd be best off with no housing costs to worry about.

Yes once kids are out of education, Uc would be very little , if anything on 24k so it would definitely benefit op far more in the long run to own her own home as long as she can afford maintenance etc.

Rathouse · 30/07/2023 19:06

Do you currently pay your full rent OP? If you pay all your rent approx £450 a month (depending on what part of the country you live) just guessing. I would possibly live in the inherited house and free up the rent money on the debt. How much debt are we talking? 10k or less?

Rathouse · 30/07/2023 19:11

WarmBeerAndSandwiches · 30/07/2023 16:22

You would be mad not to move into that house. You say it's in a better area and is sound. You would keep the child element of UC and wouldn't need the housing element as you would have your own house. Renting it out is not a good idea, it's getting more and more difficult to be a landlord and you need to either be good at house maintenance or have funds for emergency and upkeep work. You have neither, you have debts. On top of that you will need to file a tax return every year and you will lose your benefits as you have an income-producing asset that isn't your home.

This is probably your only chance at proper security and having something to hand on to your children. If you want to change your life and your children's you need to re-train and earn more money. The NHS is crying out for workers, think about getting a job where you have more prospects. Carers are amazing but they are poorly paid and it's hard work with few prospects.

Agree NHS support workers earn much more for nights and weekends too. OP could move into the house and have a lodger .. the money could go to house maintaining overtime

bossybloss · 30/07/2023 20:00

Sandunesandseashells · 30/07/2023 16:47

Martin Lewis recommends paying debt before having savings. He has NEVER advocating selling a house to pay off debt! He also warns against turning unsecured debt into secured debt by taking out a mortgage to pay it off or extending an existing mortgage.

I have a feeling that the people advocating selling the house are probably renters, whether private or council. It is a short-sighted aspiration to have savings that will run out in 5 years, holidays, new furniture etc. You no longer need a secure tenancy; you have a house which you own outright! Congratulations, that’s amazing!

The security that would come with a house fully paid without mortgage, which will grow in value should not be underestimated. You will leave an inheritance for your kids which will enable them to also get a mortgage, the knock on effect down generations can never be matched through cash savings.

Added to this as a PP said, location, location, location. You said this house is in a better area, that’s a superb bonus. 3 bedrooms too, so you could decorate it / diy it and down size when the kids move out, giving you cash for your retirement.

THIS THIS THIS !!!!!!!

WomblingTree86 · 30/07/2023 20:22

Obviously, Martin Lewis has never advocated selling a house that the homeowner lives in but that doesn't mean he doesn't advocate selling a house not occupied by the owner. OP doesn't live in the house and it is presumably in a completely different location. She has said she doesn't want to uproot her children so it might be better to use the money to buy the house she is currently living in, if possible.

Unexpectedlysinglemum · 30/07/2023 20:26

BackAgainstWall · 30/07/2023 12:06

NEVER sell an asset.

Rent it out and use it to start paying off your debt.

You are a home owner and that home will always increase in price over the years when we are out of this economic downturn.

But it's risky being a landlord now, what if a boiler needs replacing? Or the roof? It will cost a few thousand to get it ready to rent probably, which will mean more debt for op

gemstoneju · 30/07/2023 20:30

So many posters advising OP to live in her council house while renting out a property she owns outright as a private landlord. Technically it's legal though there will be benefit implications, but doesn't it demonstrate how utterly f-d up the system is?

Unexpectedlysinglemum · 30/07/2023 20:30

marymaryquitecontraryusedtobeafairy · 30/07/2023 12:24

@Cheesusisgrate Sorry what do you mean move? Should I go and live in the property you think?

Clear debts, no rent, more time, and then I could focus on work?

How possible is it for a 40 year old woman to get a decent job, even a career, with only care and admin experience?

If you have admin experience there are lots of courses you can do go up your skills with this, if you work for a big company they should invest in
Your training you could eventually be an executive assistant on 40k (if you can work virtually)

Ourladycheesusedatum · 30/07/2023 20:31

WomblingTree86 · 30/07/2023 20:22

Obviously, Martin Lewis has never advocated selling a house that the homeowner lives in but that doesn't mean he doesn't advocate selling a house not occupied by the owner. OP doesn't live in the house and it is presumably in a completely different location. She has said she doesn't want to uproot her children so it might be better to use the money to buy the house she is currently living in, if possible.

I'm not certain she can do that. Selling and buying take time. What does OP do if between selling one and buying the other she is declared as deprivation of assets?

Not a chance I would take. A mortgage free house is a great opportunity. I'd grab with both hands, if the house is sound.

Unexpectedlysinglemum · 30/07/2023 20:31

If you like caring, then perhaps a radiographer course? The nhs is looking out for more of these.

Maiden2021 · 30/07/2023 20:39

Cosyblankets · 30/07/2023 16:39

I'm a landlord. Not a HMO but i do not pay 100 a month insurance. I think my landlord insurance is about 250 a year. 3 bed semi.
However OP has said that the decor is dated. So she will need to factor in redecoration. Where is that money going to come from?
Another thing to consider is the epc certificate. Currently needs to be at least E. But this is changing soon to C i think it is.
Electric and gas will need checking and you will need certificates for these.
You will more than likely have to pay council tax from when the house is yours.
You will also need to factor in a cushion of money for repairs like a new boiler. Yes you can save up from the rent you get but what if the boiler breaks in the first few months.
In your position i would sell and invest.

Show quote history

agreed. I am a LL too. op cannot afford to live in this new house. sorry.

I would never give up 96 rent for that new house and she has a secure tenancy which once you lose it, she will be considered intentionally homeless. she needs benefits advice not property advice.

unless a change of career which she has 100 percent resisted.

Unexpectedlysinglemum · 30/07/2023 20:39

marymaryquitecontraryusedtobeafairy · 30/07/2023 12:41

@Azandme thing is though I don't have rent money, it comes from UC.

So I could move into the home but I would not have one iota of extra income, in fact I would have significantly less income.

I get that a home you own is great but it's also a potential money pit isn't it? Repairs, boilers, leaks? I'd have to take out all sorts of insurance policies. I might go under.... but then I pay no rent... I'm trying to understand the position I would be in but it's difficult.

Another option op is instead of accepting this inheritance property in your own name, is to directly 'gift' it to a trust for your children, so that they are the owners not you. Then it won't affect your benefits and you can keep your council flat too and maybe work towards buying that one day. You'd need to seek advice on how to do this but it's definitely possible my grandmother gave her sisters house directly to her children.

Your children could rent it out either to long term tennants or on air bnb with a management company if that's appropriate for the area. There are still risks that you'd need to spend money on the property wear and tear but if, instead of spending any of the money that comes in from the house, it is saved in a repairs pot, this should be ok, until you have a nice cushion. This won't help your own debt problems but at some point when they have saved up enough you can start using your children's cash from the house on stuff for them eg pay for their clothing or school trips etc, so no yet you save there can go towards your debts. And your children will have somewhere to live together or sell later in life

Unexpectedlysinglemum · 30/07/2023 20:43

Babyroobs · 30/07/2023 13:00

Those suggesting op rent out the house- surely the council don't allow people to stay in council housing when they have a property to rent out to others??

She should put it straight into her children's name not accept it as inheritance for herself

Unexpectedlysinglemum · 30/07/2023 20:45

DoubleTime · 30/07/2023 13:20

Hi OP,
These are just my initial thoughts, so feel free to dismiss this if you don't think this could work -

  1. clear your debts
  2. put as much as you can without affecting your benefits into an ISA
  3. Buy a decent, reliable car that you won't need to replace for a long time
  4. Treat yourselves to a much-deserved holiday (doesn't need to cost the earth).
  5. Put some money into bank accounts for your children, and as they get older they can use it to buy their own clothes, computer, mobile phones and take financial pressure off your earnings
  6. Put the rest into a personal pension or your employer's pension where it will get 20% tax relief

This is the best advice

Unexpectedlysinglemum · 30/07/2023 20:47

Saltnvinegarcrispsplease · 30/07/2023 13:28

I am not a legal or financial expert. Just a thought though: Were you left this in a will? If so it is possible to amend the will as a beneficiary so the money goes directly to your children. Called a deed of variation I think. If that's what you want.

Yes DO THIS

Maiden2021 · 30/07/2023 20:47

our children could rent it out either to long term tennants or on air bnb with a management company if that's appropriate for the area.

oh, how just can OP's kids rent out this New house when OP is in poverty? Their income from this TRUST will need to be declared as part of household income if not whole trust. Op needs more realistic advice as she genuinely hasn't a clue what/how todo it. Hence being warned of making herself intentionally homeless and may never afford private rent if she make the first move wrongly.She only has one chance to make the correct decision or risk losing it all.

Maiden2021 · 30/07/2023 20:48

Unexpectedlysinglemum · 30/07/2023 20:45

This is the best advice

Show quote history

agreed.

gemstoneju · 30/07/2023 20:50

Maiden2021 · 30/07/2023 20:39

agreed. I am a LL too. op cannot afford to live in this new house. sorry.

I would never give up 96 rent for that new house and she has a secure tenancy which once you lose it, she will be considered intentionally homeless. she needs benefits advice not property advice.

unless a change of career which she has 100 percent resisted.

Show quote history

Of course she can afford to LIVE in it. By strict budgeting and tightening her belt. Her income is £24K a year plus child support if she gets that. Decorating is hardly a priority. @Cosyblankets is talking about being a landlord. She can't afford to rent it out because the outlay is too much and she's already paying off debt. But as a long term gain, she should definitely take the new house

Maiden2021 · 30/07/2023 20:53

LL is what I was referring to. Sorry if I missed posts where OP has worked out how she can live in it without renting out rooms- My reading tells me that's what OP thinks she can do: move in, rent out room/s then voila: large income coming in without changing careers to earn more. no?

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