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.

You said you live in a dire part of the country and that the house left to you is in a better area...just this part of your post makes me think that you should move. It would open up opportunities for yourself and your kids in the long run.Better job opportunities and better schools for example. Yes you won't have your rent paid for and you will have to keep on top of what need to be done in the house but it is not as bad as you think and it will give you a lot of satisfaction in the long run. You are not used to it because you have been living like this for a very long time...take a chance and improve your and your kids lives .

I would stay where you are, clear your debts, create the savings pot you are allowed to have and still claim benefits and and spend the difference on improving your life. Better furniture, new carpets, a new car if you drive, a holiday for you and the children perhaps.

I would not be giving up a council house and that secure tenancy under any circumstances.

You don't sound particularly happy where you are ('dire') and you will benefit from living in a better area as your kids get older - schools may be better too. I wouldn't buy the council house if you're not content with the area either.

Unless the surveyor's report came back to say the house was subsiding or the garden was full of knotweed, I'd jump on it. But you would need to live a pretty modest life while you paid your debts off. You'll have an extra few hundred a month - how much rent do you pay now? Would five years paying £400 a month off be feasible? I know it sounds pretty shitty but you're paying that in rent anyway - it's all dead money at the end of the day.

That's only true if she doesn't live in it. You can own a home on UC.

I would seriously consider moving in to the inherited house. It will increase in value, no rent or mortgage to pay…ever. You are young, you can do it up cheaply over the next few years. If it’s a better area, that to me, would be a no brainer for the kids.

Yes but not if you own an asset worth 80k that you are not living in. If op were to live in the house that would not be a problem, but she cannot live in her council house and own a property worth 80k- her benefits would all stop because she would have an asset worth more than 16k that she is not living in.

Yes, that's what i meant. If op lived in it

Yes of course - but my response was to people who are suggesting she rents it out. That would stop any benefits straight away.

I think if you move in to the property, you would've more financially stable for the future and maybe, as you wouldn't have capital, it wouldn't affect your benefits apart from rent allowance? It would save you on monthly rent surely?

Yes living in the property would be the best option all round if it works for her family. It's a no brainer really. A secure home, benefits still coming in, can gradually do up the house and seek help for the debt.

Sorry OP, I didn't see your post where you said you get UC/HB for rent. I can see the dilemma now.

@paradoxicalfrog yes they can. Anyone can be a council tenant, it’s not means tested. Also she says she doesn’t want to move.

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 a one-off opportunity to try and improve her life long-term.
Relying on benefits means you are at the mercy of governments, they can reduce them, change eligibility criteria, reduce caps on rent etc etc.

You really need financial advice OP. Dont squander this money, its not a huge amount in the grand scheme of things, but you need to maximise the impact it could have on you long term.

I will keep a house and start fresh, rent-free, but this is my opinion, nothing else. You need the opinion of a financial adviser, not mine. I wish you all the best! Speak to your kids also, and see how they feel about it, maybe schools are a little bit better over there, research the area and good luck.

She already has a secure house if it's a council house and the rent is currently paid with the universal credit. Obviously if she has significant savings after paying off debts UC might reduce but it depends on how much the debt is. You're allowed some savings before UC reduces.

OP can you give us more information about the other house?

I would literally jump at the chance of owning my own home outright and having something to leave my DC as inheritance.

But at £80k I’d be very surprised if it’s fit for purpose.

Is it big enough to house you all?
Are there jobs you can do in the area?
Is it fully paid off or would you need to get a mortgage?

I said up thread I wouldn’t give up your council home as I assumed the new place wasn’t suitable but if it is suitable then I’d move into it.

You get the same amount of benefits but just not the rent part which you won’t need anyway.

And if you go to a debt consolidation company then you’ll have much more extra money to use towards home insurance and home improvements.

OP what is your current highest qualification?

I would pay off debts first.

After that I would look at how to improve career prospects and pay. What that might looks like depends on your current highest qualification.

The debt is 20k. There would be no UC with 50k+ in a bank (taking off fees and costs of selling)

You also have to take into consideration that your benefits will reduce once your DCs reach a certain age and your rent will have to come from the money you earn from your job.

If the new home is suitable then you don’t have to worry about paying the rent with your earnings once your kids move out.

If you can at all swing it (and because you say you're happy where you are for your kids), keep your council house, and rent out the inherited house for income. You can always change this if you change your mind.

Believe me, it takes very little to make a house rentable.

This is how the rich get richer. They do all the sums, and discover which works best long term - and council rent plus income from an owned property definitely works best. If you sell, that money will go, it'll just evaporate. Better to keep the asset and have ongoing income.

I would pay off all debts. Stay in your current house and continue working (whilst also looking into courses/further education training).

You would have the money to re-train.

Is there any other career that interests you?

It won't be paid for by UC - she will get a rent element but on wages of 23k or whatever that rent element is reduced significantly by earnings ( the whole award is reduced), so in no way is she getting all her rent paid. On UC is she moved into a home she owns outright she would then get the higher work allowance, so unlikley to be worse off.

https://www.sunnyavenue.co.uk/insight/can-i-buy-a-house-and-keep-my-council-house#:~:text=You%20must%20seek%20permission%20from,the%20Right%20to%20Buy%20scheme.

• Can I buy a house and keep my council house? - Key TakeawaysYou must seek permission from your local council and review your tenancy agreement for any restrictions on whether you can buy another house while keeping your council house. Doing so may impact your eligibility for housing benefits and the Right to Buy scheme.
• Owning a buy-to-let property alongside your council house can affect your entitlement to housing and other benefits.
• If you plan to rent out a house while keeping your council house, the Right to Buy scheme may not be applicable.
• Keeping your council house while inheriting a property depends on factors like your tenancy type, the value of the inherited property, and local housing policies.

More rubbish.
No, it does NOT take 'very little'. Especially with new regulations on LLs.
You sound like one of those slumlords. I hope you aren't an LL