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 the debt, decorate your council and buy anything else you need (clothes, stuff for the children) to help prevent going into debt in the future. Have some savings up to the limit for Universal Credit.

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.

You need to provide some more information before anyone can give a good answer.
How much debt do you have?
What is the value of the house you have inherited?
How much is any remaining mortgage on the house?
Where is it in relation to where you live now?
How old are your children?
What sort of family/support network do you have where you live?
How did you accumulate the debts?
Are they likely to build up again?
What is your current rent?
If there is a mortgage on the inherited house, how much would mortgage payments be?

If you can answer those, this is a good starting point to look at all your viable options.

Good luck, how lovely that someone left you this.

Depends on the debts and how much UC etc you get.

I would veer more towards moving into the house and being mortgage free. Using my rent payments to tackle the debt. Long term that would leave you with more disposable income to go towards fixing the house up etc. You would still be entitled to tax credits etc if you owned the house.

If you sell and pay off your debts you lose future security and you lose your benefits. It depends on the debts though, as long as you are servicing them and they are not accruing more interest than you can pay off then there's no rush to clear them.

If you sell and pay off debts then you would be expected to use that capital to support yourself until it drops below a threshold (£16k) so in 5 years you could find yourself still paying rent, still on benefits and your capital is gone.
This is your one chance to own a property outright and it will only go up in value.

How far away is property from friends family work school

How big is debt

You say you will have to change schools so is it a few miles or hours away so the first 3 uou will still be near

Rent free property is a biggie

So I would move there

With the money paying towards rent I would pay debts

Definitely contact CAB for advice - it’s free and most bureau have finance/debt experts.

If the house is in a better area I'd move into it.
Doing it up can be a slow process. DIY a room at a time.

I'd forget any schemes or idea of trying to flip houses, or renting it out. People are getting out of the rental business for a reason

• Sell the house.
• Pay off your debts (this will immediately free up extra day to day cash as you’ll not be paying interest on them or juggling monthly repayments out of your normal income).
• Bank whatever is left of your inheritance in a high interest account (if they even exist) or in premium bonds.
• Start saving any extra day to day cash you’ve saved on debt repayments to add to the inheritance as a deposit on your own property at some point.
• Sit tight in your secure council tenancy until you’re in a good enough financial position to buy your own property.

Don’t start looking into buying and flipping properties, your financial position is too precarious for that kind of risk taking, concentrate on creating your own individual financial security before you even consider luxury hobbies such as property development in a market like this.

This. I can’t believe that someone in a position to live in a house they own mortgage free is even asking the question.

Me neither. Just madness

Although, I realise that having a chunk of cash sat in savings may well negate your right to benefits. You may need a financial advisor who could possibly give you some ideas about storing the money in a trust for your children, so that it doesn’t fall into your benefits calculations.

Move into the house. You'd be foolish not to, chances are you won't ever be able to earn enough to secure housing for yourself. Your kids will be fine moving schools, it won't damage them anymore than living in poverty on a rough estate will.

@Riverlee Thank you. I could use about 20K to become debt-free then live on the rest until I have to claim benefits again.

But I want to get out of the poverty trap. I'm going to seek a different type of job work when my last kid moves up a year where there's more free childcare at school via groups.

But I doubt I can move up in anything at my age with a lack of experience.

This

I do think if you are reliant on UC topping up your wage, you need to factor in how much of the £80k would be left after paying off debts - I’m not sure how much savings you can have without losing your benefit too ups, but if you say, only spent £15k on your debts then had to spend a lot of the rest of the money topping your income back up until it’s gone, you’d be better off moving into the house, accepting the school changes - losing just housing benefit top up benefit but once your dcs have left home, still having that full asset value.

so it really depends on how much your debt is, how much benefit top ups you get, how much rent you pay now, and how far away the property is (as in, can you keep your job if you move there).

This. If you sell it the money will go anyway and you won't get it back. This may be the only chance you have to own your own home (and your children eventually to own theirs, it isn't exactly getting easier for young people to buy). Pay off your debts with what you save on rent. Maybe let a room to a lodger if you can - you can get that tax free (I think it's up to 7k pa from memory).

I’d move into it. Then you have an asset. First priority is putting what would have been your rent money into paying your debts. Once that is done, second priority is doing up the house basically with diy on the cheap over a looong period.

Can't stress this strongly enough : do NOT sell the house. Use it as an asset to live in rent free/ with a lodger if you have space, or rent it out for additional income.

Pay off debt, retrain/set up own business to enable you to better your future. Job centre has advice if you want tk ho down the business road, or princes trust if you meet criteria. £60k is a good cushion to reestablish yourself

Ok just seen it’s £20k. Try not to sell.

work out how much you pay in rent VS how much you’d lose in benefit by not needing rent help. If your rent isn’t currently 100% paid by benefits, then you’d be better off in the house using the extra money you now pay in rent to pay down debt.

@UnsungShero Honestly my debts are around 20K and I barely touch that but they leave me along.

I realise I would lose benefits, this is part of the issue. As for renting it would bring around £500 max a month and that's less than I get from benefits.

When I say a trap it really is because even when I attempt to get a better paying job I will only be on the SAME as what I get now doing as many shifts as possible then my top ups.

I made a lot of mistakes in life.

@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?

do not sell the house , it’s a asset that will help bring financial stability.
you should live in it pay off your debt with a larger monthly payment if possible. you’ll never need to pay rent again.
retrain in something.
get a better paid job.

This isn't the first time threads like this have come up on MN.
There is no easy answer but selling is daft. Move into it.