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.

@marymaryquitecontraryusedtobeafairy

My invoice is in the post:)

Glad to see you are starting to gain some clarity. Well done and keep at it.

One last comment, you say you have a tenancy for life, so what buy the current property? Unless say, the Council really gives you a good valuation and you will be left with plenty from the £80K, I also don't think it is sensible.

With RTB you become an owner and things like boiler breaking, insurance etc all the things you say you cannot afford for the new house, will still apply.

So, maybe a trip to RTB Council team for a valuation as someone suggested is the next step?

People with debt management plans and assumably then low credit score do not eeasily get mortgage. It's usually some special lender and terms might not be favourable as with normal lenders. I had perfect credit scode and perfrct repayment history (credot card paid every month in full and small loan couple of k), yet as single applicant and non brit with 5% deposit I was given some rates from major lenders I was not particularly happy.

Yes, not only do I not think you can get a mortgage (well you can, with unaffordable high interest because of your credit history/score), I also don't think, no disrespect to you- just being objective and going by the info you have given-, your situation is not suitable to be holding a (small) mortgage either. Of course, you may feel/ think differently.

So RTB if house say worth £30/£40k and you can pay it cash with some disaster fund remaining.

Why are you STILL avoiding answering the questions about the current legal ownership of the inherited property?
It’s very, very important and will determine how you quickly you can move forward and sell the house.
It will also stop me wasting my time if it’s all in hand.

ARE you now the registered owner of the property and if so, how long ago was ownership transferred? Do you show as the owner on the Land registry or is the deceased still named, or worst case scenario, is it unregistered?

Who is paying the bills on the property currently?
Please answer and please say if the estate has been settled and if not, are the executors solicitors or non professionals?

Are you also the only beneficiary of the will?

@BorgQueen All very relevant Qs. Yes, OP is very good at avoiding answering Qs she feels will mean her £80K is actually worth a lot less when the final transfer is made in her bank account.

Let's hope she will answer you. And yet, she says she cannot afford to pay for advice- lots of people giving/ willing to offer her real advice which would otherwise cost her a fortune to obtain.

You say on one hand that you don't want to live in inherited house due to something possible going wrong

And in rented council property they will fix this

You then say about buying your council house - but the same things apply as a home owner - you will have to pay for stuff - tho guess you mean you will have x amount left from the house once sold to pay for this ?

All benefits will stop when you sell/ buy council house as will have money in the bank

So surely you won't get free school meals etx

You don't pay any rent due to uc paying it all

You won't be getting uc /benefits if you sell the house

How much will your council house be to buy ?

Do they still allow tenants to buy as so many were sold years ago /Maggie that social housing has less houses now

How old are you children ?

TBF, OP might not have thought about all the ins and outs of the house if she was not the executer, a relative may have just said that she had been left a house worth about £80k and not thought about what it entailed with the legalities, I know when I was executer on my parents estates, the other people due money paid very little interest in it as they didn't have to do anything, just wait for the payout.

The questions are important though, because it changes the advice. I asked a few times whether she was on a DMP or an IVA because that's hugely important regarding her next steps. On one she can sell the house and do what she wants with the money. On the other she is legally obliged to sell the house and clear her debts first.
Its no good advising her to become a landlord or move into the other house or buy her council house or any of the other options presented without knowing if she can even do that

But OP can still say Re:
Q1:I don't know.
Q2:Still need to find out
Q3: Someone said it to me.

You may not have realised, but not only has the OP made it clear although she is literate, she doesn't know anything/much about this. Therefore, not only does she need advice (where we can avoid missing bits and can advise initially as I have done many times) but also need DIRECTION. In fact it is direction she is in urgent need of which can only be given by her offering a bit more. I guess she can even ask to PM some people if she doesn't want to answer here.

But the 'continued' theme of entertaining/ maintaining OP's fairytale ( we are all happy she got this inheritance) from people, understandably, with limited knowledge is not helpful to someone in Op's situation surely?

Snap!

Of course the questions are very important and now OP knows she can look into it but It's probably something that will take a few days to ascertain. She probably will come back and say but she is likely at work at the moment as I noticed she posted a lot at around 1:30pm which was probably her lunch break

I know that with that level of debt vs income and no real prospect of repaying it, I’d have gone for bankruptcy years ago.
IVA is doubtful as she has no assets to protect, only a DMP makes sense.

She could go self managed, especially if the debts have been sold on for pennies in the pound - she could pay a token £1 a month for a while then make full and final offers and pay perhaps half the full debt. Her credit is fucked regardless for up to 6 years depending on when / if the debts defaulted.

That's fair enough. In fact she has been so overwhelmed by her situation including many helpful responses here that she needed even just a few days to process it just that.

And today, she did come back a lot more focused as I praised her upthread- although I know about those of us who worked hard to try to make her not get carried away by impractical but wonderful advice, had had to really keep up with the rest. Perhaps, as we are still continuing to do to help OP. We were all even once labelled 'renters'!

Hopefully OP can now answer these very few and specific Q in a couple of days which will get her over the line and leave her with useful direction and helpful advice she can 'action'. However, it had to be commented that she avoids the Qs that would really help 'nail everything down' for her.

It’s all a bit confusing and some very conflicting advice.
The best way to get off benefits and improve your income is the move into the inherited home.
you won’t get your rent paid forever on the council house.
An asset worth 80,000 would mean it may be stopped sooner rather than later.
you are lucky and someone else should benefit from a council house as you have a house mortgage free.

Plus as the rent is paid in full means you have a lower work allowance so not sure what you get uc minus rent

If no rent as owner you will get more uc as higher work allowance so you will be better off

Also, OP, we all wish someone else should benefit from the Council house now you have inherited this property, and I and a few others would even like, in a perfect world, for the £80K to be paid to the Treasury straight away, but this is not a perfect world, so we all have to offer real and objective advice to OP given her real life circumstances.

Living rent free and in an asset that will increase in value sounds like a good option. Social housing rents are low but not nothing. Then when the kids leave home and you downsize you’ll have a little bit of capital. Is your UC dependent upon living in SH?

I would do very basic tidying and rent it out either as a shared or family house. That way your inheritance is still there and it's making you money on top of the value of the house.
I know selling and having that immediate money is tempting or using it to buy your current house.
For long term benefit of that house renting is the way. It's slow and steady improvement of living standards.
Could you train to become a paramedic or nurse? I had a colleague in the care world who did her level 4/5 management NVQ and then managed a unit which was good pay.

OP is going to lose her benefits soon. Subject to the answer on debt management she can maybe move into aunt's house, have a lodger providing tax free income and start saving that income to pay for the fictitious boiler repair. If my boiler broke and I was broke I'd have options - houses generally have backup electric immersions for hot water. Heating you can survive without in summer, by winter the lodger's rent will have built up. Insurance, as I said before, is not compulsory but is likely to cost only £10-£15 a month, including contents and she presumably pays for content cover now. That's insurance to cover fire, flood and possibly being hit by an alien spacecraft since OP seems determined to think of unlikely disasters all happening in month 1. (Insurance does usually cover you against debris from aircraft). It doesnt include accidental damage cover.

She could possibly have 2 lodgers if the children are young enough to share a room initially, although then she might be into paying tax on part of the income.

Or if she has to pay off debts she can try to buy the council house. Debt free she should be able to get a small mortgage if needed, might need a financial advisor to find one. She will then have to deal with the new boiler when it breaks. Modern boilers, IME, are more likely to cause problems.

Or she can end up in jail from some of the dafter suggestions here or fritter the money away on living expenses.

not sure what planet some of you r living on. Doing 'basic decoration before you let a property'????? So you wont be getting your electric and gas checked and certified? You wont be getting a heat/insulation certificate?

Or 'have lodgers and if your kids are young enough get them to share a room'. No way would i want strangers in my house if I had kids, especially young one.

Have some of you thought through your suggestions before giving them?

How about enquiring about a shared ownership property. Pay your debts completely off and then buy a 25% or 50% share of a place. That is an appropriate way to spend the money ( not deprivation of assets )
Benefits WILL pay towards the rent and any eligible service charges. There are specialised brokers that deal with mixed income mortgages.
Already in a council place may assist you with a discount. You’d have to enquire.

You CANNOT rent it out and claim benefits. Its value is classed as savings. Plus thinking about a house of multi occupation is for experienced landlords due to all the regulations - defo not a first timer and costs a LOT bringing it up to the fire and electrical regulations ( and gas )

so could someone clarify something here, technically its a second home so would she as someone who lives in a rented home, have to pay extra tax? and will op have to pay inheritance tax? Selling this property will mean your saving will affect al your benefits. I would move into the property, no rent or mortgage although it will affect your benefits you should be able to manage quite well on your salary.

Sorry if I've missed this but how old are the kids?

I think you need to treat this a bit like working while paying childcare. It's not profitable in the initial years but it's an investment in the future.

I think just allowing the money to be swallowed up paying your rent (in place of UC) would be a wasted opportunity.

You need either to buy your house or move into the house. No this won't improve your financial situation right now but it will in the long term.

You are making decisions based on having the kids in full time education and your current entitlement but this won't last forever. How will you manage when your benefits reduce as they get older?

You may well have a tough couple of years but you'll be making yourself much more comfortable in years to come.

Clear the debt and if worst case you need a new door, boiler, repair you should be more easily accepted for affordable credit. It would be a good idea to join a credit union.

I I was in your shoes

I would pay off the debts
I would pay a chunk down for rent in the council property, probably a years rent up front. Keep paying your rent monthly though and let the extra sit there as a buffer.
I would make sure council tax was paid up for the rest of the year until March 2024
Then I would pick a decent rate building society savings account paying 5% interest and put the rest of the money into that less £15000 - this `I would put into a bond earning as much interest as possible, paying monthly interest so the capital doesn't grow

Then I would live of the easy access savings account and I would keep receipts for everything I spent. If you go on holiday, buy some nice furniture etc so be it or if you live simply o the money in the easy access account.

Once the money in the easy access account is gone, which could be 3 years possible 4 you can again claim U.C. the £15000 will be taken into account but you'll be getting monthly interest from that money and should you need some money you have it to use for emergencies.

Your rent is well in credit and this doesn't count as savings as you are safe guarding your rental property

You will be in a far better position, with some money in the bank and a back drop if you need money in an emergency

Are you so terrified of every person that passes you on the street that you dont allow anyone near your children? OP can find a female lodger (or lodgers) who is/are statistically less likely to harm her children than any males they come into contact with. In fact these days I'd consider any teacher preaching gender ideology to be more of a risk than the potential lodger.