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.

Go on the MSE forum, specifically debt free wannabe section https://forums.moneysavingexpert.com/categories/debt-free-wannabe and post everything there, all your figures, incomings, outgoings, value of the house, etc. They will help you. The people on there are knowledgeable and friendly. I got out of debt using that forum. It's the best place to get free advice on this. Don't rush your decision but do get all the facts sorted.

BTW how old are are the dc.
Remember you can rent rooms out up to 7 grand I think tax free.. Or host students.

how much rent do you pay?
I would consider moving in, for a secure home with no rent to pay.
maybe if your rent is low that wouldn’t help
but even at say £500 a month. That’s £500 that could go to paying off your debt. In a year you could have paid off 6k worth of debt which is huge. And in a few years you’ll have no debt and still be £500 a month better off. Is it possible the house will increase in value too?
plus the current salary amount going to cover debt will then be freed up for you to use for you and your children

i would speak to someone about consolidating my Debt too - I think you can do that for free.

alternatively can you do a rent to buy on your current home. Sell the other house and buy your home. Pay your debts off with the remainder

How much is the debt? That's vital. And do you have any family support who could help you with house moves or refurbishment. Flipping properties is very difficult for amateurs to get right nowadays because the cost of building work has gone through the roof. If your uncle Dave is a really good builder then that would make a difference.

The most basic worst case answer is that you sell the house, pay off your debt, come off benefits temporarily because your savings are too high, erode the savings gradually down to £16k and then go back on benefits (discounted for savings so you'd probably need to keep using it for everyday expenses until it's eroded further down to the lower limit). You might be able to find a better plan than that, but that still leaves you with no debt and eventually £6k savings. So it's a huge improvement in your current position. You'd need to keep careful track of your spending to demonstrate to benefits that you hadn't just spent it on mad stuff or given it to relatives.

How much would a suitably sized home cost in your current area? Leaving council housing would be a very risky step but probably worth doing the sums just in case it makes sense.

Good luck.

If you go with the suggestion of moving into the home, the point about no rent is a good one however you need to factor in any repairs, servicing etc that is currently done by your landlord.
Depending on the condition of the house this could be an issue or it may not.

Does the house have a mortgage on it -I’m thinking could you keep it and live in it?

How much debt do you have?

How much could you buy your council house for? If you bought your council house at a discount you could then sell in 5 years and maybe move somewhere better.

Having the money in savings will affect your benefits. Owning a house will mean you keep your benefits (not housing benefit If course).

I would bite the bullet, uproot your children and move in. The savings in rent can pay off your debt, then can start to enrich their lives in all sorts of ways.

You have neither the experience nor the capital to start flipping properties without disrupting your children.

Don't underestimate the sheer value of not having rental or mortgage costs.

Need more info to be able to help. Eg how much debt do you have? How much rent are you paying now? And is the inherited house mortgage free?

It's an absolute no brainer that you should move into that house. You will be living rent free with the security of your own home in a better area. I've no idea why you don't want to uproot yourselves when you say that you live in a 'dire' area. Surely you don't want to stay in a shithole for the rest of your life? The kids will adapt to a new school easily and going forward you have a house as a deposit for a bigger one/better area once your life is more stable

Sell the house.
Your council rent will be a very fair price and secure compared to the open market. And there are few if any places you can buy a house cheaply enough with the funds left over, none of which will be any better than where you live now, so I say stay there given the kids are settled.
As other posters have said, look at the Martin Lewis website for advice on money, savings, keeping out of debt.

Firstly: pay off all your debts. Invest what's left in an ISA.

Secondly : allow you & your family a little treat money eg a holiday break or something nice you've hankered after for a while.

Thirdly: consider using the funds in gaining a qualification to earn more, while still remaining in a caring industry Examples might be to train as a nurse - community nurse, district nurse or qualified nurse in a care home, physiotherapist, occupational therapist, etc. Or consider moving industry is there another career you might always have fancied?
Use a little of the money to take professional career advice, find out what's involved in retraining, and what is going to suit you. Then you'll have the funds to take time out of employment to study (you can get a student loan to cover fees and possibly maintenance loan to cover living costs) and gain the relevant qualification (s) to qualify. This might take 3-5 years, but should secure you a great job you'll enjoy & will be much better paid.

Then, being better paid, and with the Martin Lewis advice to back you up you shouldn't dip into debt again.

Longer term, if you are able to save, it may be possible considering moving to a different area where housing is cheap, getting a small mortgage of the ilk your rent payments are, and transferring your job. You could also look at council house swapping to a different area if your job is portable. If you ended up in a nicer area, with a council house 'right to buy' discount & mortgage you could do quite nicely.

I'd move into the house, live in a better area, DC go to better schools (?), have the security of living in my own property and have a asset to leave my children. The council could kick you out if you got into rent arrears for whatever reason OP so you're not entirely secure in a council property,

Obviously if the house needs a lot of work like a new boiler, new kitchen. I'd probably reconsider!

As for the debt, sit down and go thought it all, work out what you can pay off and when with your current income, make a plan with creditors, look for higher paid work to pay it off quicker if possible. Go back to being a carer when your debt is clear if it's something you enjoy.

If the area is better than surely the schools will be too?

but also if it’s not far why can’t they stay in the same school?

agree with others we definitely need more info, mainly how much debt?

Is the house livable in? Even if things need fixing - broken cupboards, old carpets.

I would do the sums - gas, electric, council tax for the new property Vs rent & bills & UC where you are now.

Would you get any benefit top up if you owned a property? I'm not sure how it works. You could check on entitled to & put in the info as if you'd moved and see what it shows

I would be really reluctant to sell the house - you would pay your debts but you'd be expected to spend the capital on day to day living instead of benefit top ups so long term I don't think it would change your lifestyle at all. That 80k would go in a few years and you'd be exactly where you are now.

Sell the house & pay off debts, or move into the house if the area is better long term.

You're unlikely to get a mortgage on a b2l if your credit rating isn't good or if the lender perceives your income is too low. So getting into property by selling the property you now own is possible but not straight forward. Pls think long and hard about this option and if you do go there, when the best time to did it would be.

Personally, Id be looking at security now. The house is in a better area, it will cost nothing to live there but bills similar to what you're already paying. So moving to live in the house is a good option. Appreciate you don't want to up root the DCs but children do survive relocation. Take them to see the area. Do a bit of research to check which schools are closest and best for them. You will find a job locally with your skills etc, so income wise you'll be no worse off. You will still qualify for income support if you continue to earn what you do now.

If I was in your situ, I would not be focussing on getting out of debt, I'd be securing a home. You're obviously paying your debt off already, so you can carry on doing that. You could also take a small mortgage to pay the debt off if you prefer too.

Whatever you decide, good luck.

A house is a house, will you ever have the chance to own a house outright any other way? And I don't mean that in a mean way, it's just that many people who are now not on the housing ladder will never get on it, it's a big thing in the media at the moment, isn't it?

I'd think very seriously before giving it up.

You can have 16k and still claim benefits. Anything over that and they’d expect you to live on the money which if you used 25k a year would only last you 3ish years then you’d be back at square one.

You won’t be allowed to invest or put it into trust or anything. It’s seen as deprivation of capital. You’d be allowed to pay off debt though but you need to be meticulous about keeping the records.

Knowing how much debt you’re in is vital really to figure out what to do. But for me I would probably live in it and use what I’m no longer paying in rent to pay off my debt and build a savings account.

Another option is sell the house and put in for right to buy for your council house. You’d get a hefty discount.

That would buy a house in the north east.

Care jobs are always in demand. Perhaps consider starting over in a new area where property is cheaper then you would never have to worry about rent or a mortgage again

Find out how much it is to buy the house you live in through right to buy. If you’ve been there a while it will be a decent discount. Sell the other house and buy your home.
any remainder if any pay off some debts.

your uc will reduce because you won’t have the housing amount but your work allowance will go up

Depending on how much your council house is worth is it worth selling the house and buying your council house under the right to buy

No-one can give you decent advice without answers to some of the questions that have been raised, critically the size of the debt. However - you will lose benefits once you have more than 6k. They will impute an income from your savings that has at times been far more than you could get in interest. You could pay off your debts but the rest would gradually disappear in living costs until you were back on benefits.

You should seriously consider moving. Can you rent a room in the house to a lodger to get money for renovations or get a small mortgage that will clear the debts and give you a little towards renovations? Or can you sell the house but buy a cheaper property where you live now? A mortgage would spread your debt over a longer period making it more affordable.

Oh, when I posted I hadn't considered right to buy. But either way I'd want to be coming out of this owning a house.

I think you will regret it one day if you don't move to live in the house. A similar thing has just happened to me - not having rent is life changing. Everything else you do will flow from that. You can pay your debts from what you save in rent. I would absolutely not sell it.

Definitely pay off the debt first.

Are you allowed to buy your council house whilst owning another outright? I don't know the rules, but this would seem very odd indeed.