To ask how I can successfully ringfence this money? (Please don’t post for moral judgement)

[Jaalp]

I am a single parent to a 3 year old who will start school in the next two years. I have saved up a significant amount of money for schools fees. As a single parent I am constantly worried about job loss or anything else that could affect things. I am aware that if for some reason I was made redundant, for example, if I have more than a certain amount in savings then I would be expected to use this before claiming universal credit etc.

I have no intention of claiming universal credit but life happens and I have to be conscious of the potential things that could happen.

My question is, is there any way to put this money in an account for my child that would be protected as theirs and not counted in an assessment for universal credit etc should that ever happen?

Please don’t make this is a private school bashing thread or about playing the system etc. I’ve worked hard all my life and intend to continue to do so. Thanks.

I am not getting the impression that people resent the OP her well paid job, her considerable savings or private school plans per se.

Isn't it more to with the principle that UC is a welfare safety net, not a means to prevent an otherwise wealthy person such as the OP from having to dip into their six figure savings - even if they are planning to spend that money on education.

This is one of those somewhat double-standard situations where establishing a trust fund is the kind of respectable activity that the Times might advise (albeit usually to shelter it from tax not the DWP) but if someone from the wrong side of town tried to hold on to even a fraction of that amount of savings while claiming UC, then everyone would think it was grubby and the Sun would label them a benefits cheat.

Jobseekers is for the first six months. How would her additional savings be depleted.

I'm struggling with your or the OPs reasoning... if she has additional savings then the question of UC is moot as she wont be eligible, if she doesn't & and spends all her money between then and any claim, then she will live like a pauper on UC...

As i said earlier, the whole thing doesn't sound genuine, so you'll be pleased to know i'll be hiding this thread now.

Plenty of other ways to plan for the future without a trust fund specifically done to be able to claim UC in that eventuality.

@VivX indeed- exactly what I said earlier- the OP really shouldn't have mentioned UC -because that just gets peoples backs up when planning what to do with £200k - if she had just said how can I ringfence this money in advance on a tax efficient way and protect income and her security in terms of disability/health/jobless - then I think it would have got fewer peoples backs up

You should probably look at having unemployment insurance. It’s expensive, but basically it would keep you going while you got another job if you lost the one you have.

Nope, it’s your friends that are wrong.

Who knows? That’s that point of imagining worst case scenarios! It doesn’t mean they’re likely to happen - in fact the likelihood of them happening can even be so infinitesimally small that it’s safe to consider it zero - that’s not the point. The point is to cover your bases to account for the ‘what if?’.

Yes, if the above occurs and she has no other savings/spends them/can’t get another job then she would live like a comparative paper on UC, but if that’s a risk she’s willing to take in order to secure these funds for the daughter then she is free to do so, legally. That’s all she wanted to know.

Again, she made no comment about any other savings plans she may or may not have - she didn’t and doesn’t need to because that’s not what she was asking for information about.

Oh come on! Are you being deliberately obtuse?

Nope. Incorrect for both

As soon as she accessed the money it would transfer to her name.

And she would have to access it to pay the school so immediately it transfers her name

No, the trustee would transfer the funds directly to the school. The money wouldn’t become the property of either the trustee (which doesn’t have to be OP) or OP’s daughter.

That’s not how that works.

🤦🏻‍♀️

Is this more erroneous advice from your wealth management friends? 😂

I think they wouldn’t find their own arse with their own hands.

@Crikeyalmighty Indeed - although she would probably find that what you do for tax-planning is not necessarily the same as what you would do if you think you might want to claim UC while retaining a stash of cash.

But I also agree that the whole premise of the OP is a little incredible.
When you go to a professional for advice on personal wealth planning, it's most often to plan for tax, death and/or divorce.
I'm not saying it never happens but on the whole, people aren't asking their accountant/IFA/solicitor to shelter six figures from the DWP just in case they might need to make a UC claim at some unspecified point in the future.

Why would a high earner, apparently in gainful employment, be overly concerned about protecting £200k from the theoretical prospect of the DWP but not from HMRC even though the latter are presumably the ones actually taking considerable amounts - in the form of taxes - from the OP on a regular basis right now).

Oh my god it’s ended up on legal Reddit!

www.reddit.com/r/LegalAdviceUK/s/um8QvrGcCM

I was responding to a post about a savings account rather than a trust

People with assets do exactly that - they don’t necessarily name check the DWP but they do ask the their wealth manager/s how to shelter money for specific purposes. If she’s imagining what could happen/what she’d need to do in the event she lost her job and any other funds in her name, why wouldn’t the DWP come to mind? That’s considering eventualities, not expecting them.

She wants to ring fence money so it isn’t considered for use for anything other than its intended purpose. What she may or may not be doing in relation to tax is unknown to us, and not at all relevant to what she asked about.

All of this 'can'be done - I know that after an interesting hour in the world of Google and trust funds and wealth management companies ( not an area I normally need to bother my head with) and yes money goes straight from trust to school-

However as it's not normally an area where DWP are involved - that seems a bit of a grey area-

I can understand why grandparents might do it for instance to remove it from 'their' assets and so the parents can't access it Willy nilly - or money left in a will so it can be drip fed and accessed when 18 - but I'm not sure why the OP would do it in these circumstances unless it is indeed a lump sum that she just wants 'out the way' ,especially if it's a grey area as to whether it would affect a claim.

I certainly think the OP would be advised to prioritise herself a bit more if all this money has been saved purely for this purpose , with little extra provision to protect herself personally and the fact UC has been mentioned at all makes me think if this is genuine , that's the case.

And what interesting replies immediately returned, despite the many people on this thread pompously declaring the OP's little scam as completely legal and fair.

You mean you posted it.

OP isn’t looking to put money in a trust in order to claim UC. She doesn’t intend to claim UC.

Yes, if she ever found herself needing to claim UC she would have to declare the trust.

The DWP would consider the trust, and whether her establishing it constituted deprivation of assets. It would not be automatically considered as such, and judgement regarding that would depend on multiple factors.

Putting money in a trust when financially secure, when there’s no reasonable expectation of needing to claim UC, does not constitute deprivation of assets. Putting money in a trust during a financial crisis and attempting to make UC claim after a short period of time, would.

@InterIgnis well it's certainly a thread for thought. I myself will be off buying paintings, currencies, vinyl, collectibles and other such stuff over time as well I reckon , ( stuff I can sell off further down the line) just in case I need to claim- rather than cash in the bank, seeing as it seems we are all mugs if we don't plan like the wealthy -

Putting money in a trust during a financial crisis and attempting to make UC claim after a short period of time, would.

To be honest it does seem likely that the OP is thinking about this in the short term. Maybe she feels her job is insecure right now (many are, as it is indeed a period of financial crisis in many countries) and as she has stated she does not have other savings, if she were to become unemployed now, she would end up on UC.

If the OP is in a high-paid job and has already socked away all the funds for her child's education, surely over the next period her focus will be shoring up her financial security, which she should be able to do quite easily. So if she lost her job a few years down the track (when deprivation of assets would become less apparent), she would have her own cushion to land on.

Well yes, she says she’s constantly worried about financial security for her child. That doesn’t mean she has particular reason to be worried.

She didn’t say she doesn’t have other savings - she may well do. It would be in her interests to shore up financial security, yes, but I’m not going to assume she isn’t already.