Inheritance means we'll no longer get benefits. But I don't want to waste it...

[craycray]

Basically I've been left £20,000 by my grandmother who's just died.
OH earns £12,000 and I have just finished university with a 2:1 degree and am searching for work, but am struggling to find it.
We get around £9,000 in various benefits, but as we now have savings of more than £16,000 this will obviously do down significantly by about half.
I don't want to be greedy but £20,000 would last us 4 years ish if we used it to replace the benefits lost. But we would one day love to buy our own home, when we both finally are able to get good jobs and obviously £20,000 would be an amazing deposit to have ready to go :/
Would I be able to put this money in my son's account instead? Or am I just being stupid?
I might as well just go out and spend all the money on something nice for us, a car or holiday? Which seems slightly ridiculous!

They do random checks where they ask to see your bank statements, so a sudden credit of 20K will not go down well. You're better off telling them that you've inherited this, cancelling your claim, spending it as you would do normally (food/bills), then claiming again once it's low enough. The benefits are a safety net until things have improved, and even though it's for a sad reason, things have improved.

If you spend it, your benefits will be reduced as if you still had it, so no you can't spend it on something stupid (and it would be very difficult to spend it on something useful, like a better car, for the same reason).

The system isn't stupid

Putting it in your son's account wouldn't work if you're in charge of his account. If you can take money out of his account it's classed as yours for benefit purposes, so far as I know. And my sympathies - I'm looking at a similar situation if parents pop their clogs, and it is frustrating to think I'd have to use any inheritance to live off, rather than using it to eventually rid myself of the need for HB entirely.

ijustwanttobeme - But presumably taking a dim view means nothing, they might take a closer look at my claim but I wouldn't be breaking any rules? I'm not saying I WANT to do this. I WANT to save my money! It just seems odd, that someone with a house worth however much can still get benefits but someone renting with money in the bank can't?
But again, like I said, I don't enjoy being on benefits and having to scrimp everywhere to get by, hopefully soon I will be employed and will be able to support my family alone!

You can't just spend it. You have to declare it. It's the law. If you spend it they will want to know what on and you can be penalised if they class it as excessive. Ie you blew it all on a car. I seem to remember they ask you the value of any children's savings as well as your own so you can't give it away either. It might seem pretty shitty but it is there to protect the pot from large scale fraud and people with large savings from claiming benefits because they have a small salary but tens of thousands in the bank.

I used to get tax credits and housing benefit but now we are no longer eligible (only just) but I do feel £16k allowance is pretty generous.

Use the money to give yourself the boost you need to get a job, volunteering, internship, new clothes, more training, travel... Then you are investing in your and your family's future. Your gran would be proud of you.

I pay the taxes which fund your benefits I'd be happy with that.

But those in a house mortgage or owned outright wouldn't be getting housing benefit to pay for the house?

The housing benefit office will want to know what it has been spent on and can refuse benefits if it has been moved into children's saving accounts or wasted (my dh works for our local benefit office and this is what he has told me)

Ah I see, so it would affect it.
Thanks for all the helpful comments, I am not deliberately trying to scam money out of the government, or take money out of the pot I don't deserve.
I'm sure if a similar thing happened to those of you who receive benefits you would understand the sudden mix of grief, panic, disappointment and frustration.
I know that my Gran would love to have seen this money go to some use and would love to have thought it would enable us to have a better quality of life. Though it seems it won't.
Best just get back to my job applications and hope something pops up sooner rather than later!

Hello OP

I know you don't get to keep benefits in the case of inheritance, but you do get to keep tax credits. I know several people who have done because they are interested in income not gifts.

Good idea Moid1. Thankyou.

Lady yes I know about VAT I not stupid. There have been studies that show only some high rate tax payers pay more in than they take out .

I am not stupid! Hardly proved my point there!

You can re-claim once this falls, so you don't need to spend it all. They won't ask questions if it's spent on normal things, like bills and food. Do you have some bills that you need to clear? Normal living costs are very different to splashing out on a car.

Stormy children can have 3k in accessible savings before it affects their parents benefits.

It won't take long to spend the four thousand sensibly. If you are allowed savings, declare them.

Buy 4k worth of gold?

OP, how are you inheriting this? Is it an official will or are your parents/Aunt/Uncle just sharing out what's left? If it's the former, then I'd ask your parents to keep £4k for you and not hand it over in the first place.

But also, have a little confidence in yourself! why do you presume you won't have found a job in the next 4 years? It's unlikely you will be in the same financial position in 6 months time. I'd spend it carefully between now and then, as others have suggested, perhaps pay out for anything you might need for work (like suits, a small car to get around, if you are in London, paying out for an annual travel card), might be a good way to use it to set yourself up.

Unfortunately, it can seem unfair, as is it is for those elderly people who have scrimped and saved to put money way for their funeral. It is still their savings even if they have no intention of touching it.

Having capital in a child's account that a parent has access to is treated as the same as them having. Unless it's held in trust and cannot be accessed till the child comes of age type thing.

I realise you'd rather your nan's money went towards something else, but - and I mean this with the most respect and not in a patronising way; could you not look at it as your late nan will be helping you come off benefits, even if it is only for a short while. Once your savings have fallen below the threshold you'll be able to claim something again.

Then you can keep the rest of it (untouched) in an account without a worry.

Just be aware that 16k is the top of their scale. I earned very little a few years ago and was given full housing and council tax benefit. When my tax credits increased by £50 a week (disabled child element) they reduced the housing benefit and I was libel for full council tax costs. I didn't have 16k, I wasn't bringing that in a year. For each little bit extra you have, they deduct (I can't remember the ratio). 16K will mean you get 0, but 14K may mean that you get £1 towards your rent, 12K may mean they give you £2 and so on, if you see what I mean. Don't assume they will start to pay at your current amount once you reach the limit.

Lady they should have put a disabled premium onto your housing benefit claim.

Also again you can have 3k in a child's accessible saving account it is NOT COUNTED AS PARENTS INCOME.

So if you have £20000 why do you need benefits to live on?
Benefits should be there to help people who need them, with £20000 you don't

Benefits are to help people. This is wrong

IMO, OP your are the epitome of entitlement. We would all love to not have to spend our money on living costs and save every penny, but it doesn't work like that.
All my friends are in work and bar 2 of them none of them have anything near £16 k in savings, i doubt any of them get any benefits and have to fund their own lifestyle.