AIBU to worry I will never be able to use inheritance money?

[WanderingStar26]

An inheritance one, kind of.

I am a single parent, I have a disability which limits how much I can work, I live in a HA house, my youngest child is 16 and going to college in September.

I’ve been aware of the fact that I have had the buffer of UC for years, as well as working PT, but that will be coming to an end (or at least massively reducing) when my youngest finishes education. I have been really trying to up my earnings (I’m self employed), and I’m doing better than I was but it’s difficult health-wise, and I’m definitely not going to be able to get a mortgage anytime soon.

Today my DF announced that he was selling one of his properties and splitting the money between his 4 DC. My three siblings all own their own properties, so that’s really handy for them as they can pay off a chunk of their mortgages. The stipulation to this money is that it can ONLY be used for property, so if I can’t buy then I won’t get it, basically.

It’s very generous of him but realistically I’m not sure how I will ever be able to make use of the money? I repeat, he will not let me have it unless it’s going towards a property purchase. Which is fair enough I guess as he doesn’t want to see it wasted. But I don’t see a realistic chance of me buying a property, ever, sadly, much as I’d love to.

He said he will put my share in an account and when I need it I can have it. But I’m mid forties now, my health seems to be going downhill and despite me really doing my best, my income isn’t ever going to be at a point where I can get a mortgage.

I’m not sure what to suggest? Maybe ask him to put it in a trust so it might benefit my DCs in future? I’m just worried that if it sits in a random account then eventually I might have problems retrieving it from the wicked stepmother (a whole other thread), and best case scenario will end up losing a chunk of it to inheritance tax. My DF is 73.

Yes but her reply didn't make sense. She wouldn't need a mortgage for a shared ownership property. She could buy her share outright.

Shared ownership properties are very expensive so OP may not be able to buy more than 25%. Who will pay the rent?

If you bought a shared ownership property the £60k might be enough to buy the owned part outright - no mortgage needed. And if you needed a bit extra - say, another £40k - you probably would get a mortgage for that. Don’t fall into the trap of assuming you can’t get a mortgage. People with terrible credit or a low income can get a mortgage for such a small amount and a hefty deposit.

I don't understand why people are criticising the dad here. As if he's being nasty or controlling. It's a direct consequence of benefit rules to punish those with savings.

OP is on benefits, most of which will disappear completely if over 16k of saving are in her name. Thereby forcing her to spend that money until the savings drop below 16k again. If the dad gives her money now, and she invests it sensibly, it will disappear into the state coffers via reduced benefits. Completely worthless gift.

Since you're anticipating your benefits to drop quite a bit in a few years anyway it makes much more sense to hold it in his name until after that point. I would push again on the land / business idea though; can you come up with specific plans, costs and benefits?

I’m not sure if it’s been suggested, you can purchase a share of a property where you own say 20% of the value (which could be the 60k) then rent the 80% universal credit will pay towards the rent element and you won’t have a mortgage on the other half as it will be owned.

Just to say I will be back to the thread later, I’m at work all day today.

UC will give housing element for the rent on SO properties

Would that be sufficient to get on to shared ownership - your deposit, then rent from your income?

I've a private pension through Standard Life that my Dad pays into for me.

Housing benefit may not cover all of the rent element.

Can you use right to buy and buy the home you live in with your share.

When your DC starts working you could get a joint mortgage with them?

One client didn’t turn up so I’ve just had a quick look and shared ownership could be an option. Eg there’s a 25% share in a 3 bedroom house in a nice town not that far away for 65k. But that would be a bit too far in terms of my business, I’d have to start that again from scratch. I will keep checking to see if nearer ones come up.

There are usually shared ownership plots on all new build estates. Maybe have a look on the websites of housing associations in your area. I found the one my step-son ended up buying on rightmove just by selecting the area he wanted and looking low to high on properties in that area.

He had a nice house on a new estate. It looked exactly the same as the fully owned ones but fixtures and fittings may have been that bit more basic e.g kitchen didn’t have a dishwasher but there was space for one.

If you get it now, you will end up just spending it all until its 16k left. Is there no way you can buy a small property

Do pension savings affect UC entitlement? I am guessing they don't. So if that's correct, your dad could give you the money to put in a pension, and you can get 25% when you are 58 (I think, it used to be 55).

@WanderingStar26

What you and more importantly your Dad need is a STEP solicitor.https://www.step.org/directory/members/search

Yes ask him to put it in an account in your sons name. Or suggest something else you could use it for - private health treatment etc.

Is shared ownership an option for you? There are some really nice new builds and you may get a 20/25% share outright and pay rent on the rest.

How we she afford rent and repairs etc when she loses her UC?

Pension savings don’t affect UC but there’s a threshold as to how much you can put in annually and it sounds as though the inheritance amount is way above this. It would have to be drip fed into the pension bit by bit. Whatever OP and her dad decide, it’s important to remember that the moment that money hits OP’s bank account it will be counted as capital and UC will stop until she’s under the thresholds again - and she’ll have to provide proof of how the money has been spent.

But that’s subject to LA housing benefit thresholds so may not cover it all. And if OP loses her UC entitlement at some point as she seems to think is the case, she’ll be stuffed.

I can see where your DF is coming from. If he just gives you the money, then it will stop your benefits and it will go on day to day living costs... and it sounds like he wants it to make a proper difference to you in the form of helping with housing (which is what the DWP would accept as not being Deprivation of Capital).

@XenoBitch OP isn’t ever likely to qualify for a mortgage, so he’s being very unfair.

I wonder if the stepmother has put him up to it - knowing full well OP can't get a mortgage yet insisting OP's father says to OP "You use this to buy a home and that's your only option" - with a view to getting her hands on the money.