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Higher education

Talk to other parents whose children are preparing for university on our Higher Education forum.

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Original poster

Loan for University and inheritance

29 replies

Anyonewhoknows · 25/05/2018 14:34

My DC is due to start university this October. He received quite a substantial inheritance when he turned 18. This is currently just sitting in his bog standard bank account. Does he have to declare it when applying for maintenance loans? I have googled but can't find an answer. Have spoken to his prospective university who said it makes no difference to his tuition fees. I am a single parent on minimum wage and the inheritance is from his other parent who died a few years ago. Just want to make sure he does everything right. Any advice would be most welcome

OP posts:
Original poster
Anyonewhoknows · 25/05/2018 15:56

Hopeful bump

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MNHQ
LornaMumsnet · 25/05/2018 16:05

We're just moving this over to higher education at the OP's request. Flowers

Original poster
Anyonewhoknows · 25/05/2018 16:10

Thank you Lorna Flowers

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RedHelenB · 25/05/2018 17:00

Does it ask for his capital anywhere on the form?

Original poster
Anyonewhoknows · 25/05/2018 17:40

No. Only his taxable income for the next year. Just want to make sure we aren't missing anything obvious.

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MarchingFrogs · 25/05/2018 18:48

As far as I am aware, only income (earned / interest on savings / rent received etc) is taken into account.

Original poster
Anyonewhoknows · 25/05/2018 19:04

His inheritance is in his bog standard account so earning minimal interest.

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Original poster
Anyonewhoknows · 25/05/2018 19:05

Sorry, thank you both for replying. This has been playing on mind. The university were helpful re fees but couldn't advise me on maintenance loans.
He has submitted it all now. Answered truthfully what they asked.

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MrsSnitch · 26/05/2018 08:48

Move the money! He should be maximising his return rather than let it sit in an account. Which he could dip into and fritter away. He should get some investment advice and at the very least invest in an ISA so returns are not taxable. I’d be most concerned to ensure the funds are not easily accessible as I know from experience new students get very giddy with money especially in the first term when they are doing a lot if socialising

ndjdbr · 26/05/2018 11:37

I was in his situation and it didn't affect my loan at all.

EllenJanethickerknickers · 26/05/2018 11:42

Second the advice to put most of it into an ISA (depending on how much it is) and/or some other savings account. Interest rates are really low so that wouldn't really affect his income by much. Preferably one that is locked away for a few years. Keep some in an easy access saving account for spending in an emergency or one off purchase like a car etc.

Frax · 26/05/2018 13:18

They will only want to know the income from the capital and your income. Has the money not been in trust?The trustees should have invested it more wisely than a bog standard bank account or an ISA which are no better. There are ways to get more from investments but require a bit of knowledge and effort.

MrsSnitch · 26/05/2018 13:50

Frax cash ISAs are pretty crap but a stocks and shares ISA can have better returns, this needs advice and management. My student has a Fundsmith ISA and so far has had a 20% return

Original poster
Anyonewhoknows · 26/05/2018 17:19

Don't know what the trustees have done with it in the last 9 years. DC turned 18 and they transferred it all to him stating they were glad to not have the hassle anymore. He is on a spending spree at the moment and it worries me.

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Original poster
Anyonewhoknows · 26/05/2018 17:23

Its over £100k. I am on minimum wage and have history of being crap with money (not any more but yes he has been brought up strughling) so I can understand why he doesn't want to listen to me. But nobody else is advising him. He said to me today the responsibility is too much for him but I don't know where to start. He wants to focus on his exams before he discusses it.

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Original poster
Anyonewhoknows · 26/05/2018 17:26

I know what the property sold for and matches with the inheritance so it looks that it has just been sitting in a bank account waiting for Ds to ask for it at 18. That doesn't matter now. I don't know how best to help him without him going mad with it but still being able to enjoy some of it.

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SleepingStandingUp · 26/05/2018 17:36

I'd see what the balance is on it.
Will he use a car for Uni? Any other big purchases?

If not I'd split it. If its 100k then 80k into s high interest, hard to access account.
20k into an account for which he can get access but that he doesn't hold the card for.
Then monthly bank transfer from that into his main account where any wages, student loan etc goes. That way he has money coming in every month so he won't starve - maybe £40 a week if he has student loan too?

That way it's still making his life easier at uni easier but not so that he doesn't have to learn to budget.

Depending on where he goes to Uni the other option is to lock it all away and could be get a small property in his unI town for that money? Rent it to some mates plus live in it so he's earning their rent and he's got a solid investment

Original poster
Anyonewhoknows · 26/05/2018 17:41

No big purchases. Doesn't want a car for uni. Just spending on clothes, holidays, phone, gadgets etc. Can't get him to listen to me because I have messed up so spectacularly. Will try again after his exams.

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PotteringAlong · 26/05/2018 17:44

If nothing else split it into 2 different banks - if a bank goes bust only £75,000 is protected so he would loose the rest.

titchy · 26/05/2018 17:47

Fgs tell him to keep quiet about it at uni.

And tell him if he pisses it up the wall then he's just making the same mistake you did (dunno if you did or not but a bit of reverse psychology might work).

Etymology23 · 26/05/2018 17:52

Only the income will impact his loan. Definitely at least get him to split it across two institutions and try to persuade him to put 20k in an isa to begin with.

mummmy2017 · 26/05/2018 17:56

If he puts it into an account and leaves the cards with you.. it will mean an effort to use the cash...so will make him think about using it.

Rosielily · 26/05/2018 18:14

Can you find an independent financial advisor who may help? I'd also speak directly to student finance about your concerns.

Nix32 · 26/05/2018 18:28

Talk to an IFA. My parents have a similar amount in a Prudential Prufund account. It earns approximately 6% interest per year. They are able to withdraw 5%, so £5000, per year without paying tax. That way, they still benefit, but the capital is safe and growing. Would something like that be useful?

MrsSnitch · 26/05/2018 21:59

The trustees have not discharged their duty to the beneficiary, your son. They could be sued for not maximising the return. But hey ho. Now us the time for you and your son to at the very Least have a conversation with the bank manager. Better to go to an IFA - ask for a local recommendation and make sure they are not tied to any particular investment provider