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Inherited but don't know what to do with it. Lone parent on benefits.

117 replies

Prosopopeia · 17/10/2014 11:01

I have inherited around £21,000
I would like to hear people's views on what they think is the best way to use it. I'm worried that if I ask for professional financial advice I am going to be talked into investments or something I know nothing about, I am terrible with money matters.

I would also like to add that I have been to hell and back in recent years as both a lone parent and partner of a DV relationship, I have reached almost suicidal lows and am emotionally traumatised to the extent I am barely functioning theses days, I am robotic in action, emotions, everything really. I feel as if I'm walking the planet as a ghost of my former self.

I am a lone parent age nearly 46 with a 5 and 7 year old. I left a DV relationship with the children's father. He contributes £2.50 a week per child deducted from his unemployment allowance. He does have a cash in hand job but doesn't declare it.

I rent privately and have been here 2 years.
I have however lived at 43 addresses since birth, mostly from my 20s, moving around for jobs, change of scenery, so on. I've moved 4 times since having children already.

I am currently not working. Not for want of trying. I am desperate to work. I am taking training courses, volunteering, and so on. I have also just begun driving lessons.

I realise that once the inheritance is available (currently in last stage of DWP potential overpayment of the deceased's pension credit investigation), it will deplete very quickly, as I lose all benefits and will pay my own rent (£525 month) and everything else. I know there's a benefits savings threshold but it's like trying to get blood from a stone calculating how that affects me, and I've asked every avenue, welfare rights advisors to Jobcentre lone parent advisors to the DWP themselves. Nobody can give me a straight answer.

Obviously although it's my dream, I'll never afford a permanent home for myself and the children, even though they can be bought for as little as £85k do-er uppers. But what's the best thing to do with this money? I've never had loans or credit cards (unusual I know) and have always worked in jobs where I'm living hand to mouth really, so never been extravagant. I have a small amount of debt all from utility arrears, a couple of thousand I should think.

I have thought I should buy a car once I've learnt to drive as that would assist my job hunt, but even that feels like a waste of money as myself amd the children are used to walking everywhere or using public transport.

The children will inherit their father's house and belongings in the future (which are quite valuable antiques and specialist electronic equipment) so I am comforted that they have a future nest egg.

After paying off debts, do I invest in ISAs, premium bonds, etc? Do I blow it on a car and holidays and several pairs of Clarks school shoes for the kids currently in Shoezone-disintegratables? Do I share it out with my stepsiblings? (This is my paternal grandmother who died. She is not blood related to my siblings, and only one of the siblings has ever met her). Do I give some to charity? Do I keep it in my bank savings account?

Any opinions are warmly welcomed. The money should be available very soon and I am scared of it - at my lowest debt point I was pinching loo rolls from the customer loos in stores-and to suddenly see it trickling away and to be back at square one again no job, on benefits, no savings, is awful.

I want to make the best use of it. It's a once in a lifetime opportunity. I want to 'earn it'. I want to feel deserving of money that my grandparents worked for. I spent every weekend with my Gran and she was an alcoholic and physically and mentally abusive to me (and her whole family) but it's still important to me that I use the money wisely. I afraid I might fritter it, because I'm bad at budgeting, or will be talked into investments, and so on.

I hope someone can help me see clearly what is the right thing to do.

OP posts:
McGlashan · 17/10/2014 11:54

Put £6,000 aside at once.
I would buy a secondhand car with a long warranty and pay for the insurance etc. Kias doa 7 year warranty so even if you get one that a couple of years old you have 5 years left. Pay for a long block of driving lessons.
Buy some vouchers from supermarkets and clothing shops, toys shops etc that you could use in the next year instead of cash. Put some money in the kids account- £1000 each maybe. Book a holiday for next year.

McGlashan · 17/10/2014 11:55

The idea of counselling is a good one- to get your confidence back. Good luck.

vickibee · 17/10/2014 11:58

Invest in you future, pursue a qualification that will lead to a job.

Iwantmyparcel · 17/10/2014 12:00

I would put aside 6000.

Have a nice holiday for you and the kids and buy a small car. Also buy any needed items - bit buy decent quality eg coats, shoes, etc.

I'd also look into doing some courses /volunteering to help you get a job you want.

Iwantmyparcel · 17/10/2014 12:01

And yes maybe some therapy too.

Prosopopeia · 17/10/2014 12:19

Thanks so far everyone.

Paying for block driving lessons and a cheap car with a long warranty and first year's insurance sounds sensible.

I'm educated to A level but to be honest as much as I'd love to do a degree, I'm fed up being out of work and just want to get back into the workplace, and I'm not convinced a degree - in the area I live in with it's partocular job opportunities and the kind of hours I require and past work experience - will be much use to me. I'd want to do a fine art degree and that won't get me a job at the end of it, unless U want to go into teaching, which I don't have the personality for.

Yes, it's deprivation of assets giving the money away to friends or family.
I'm not convinced about the pension idea either. I don't mind living off very little when I'm retired, I'd rather use the money now to improve myself and my children's lives.

And Werksupp I know, I know. I've developed unemployment apathy recently, but when the money becomes available I'm sure it is going to make me walk out the same day and start cleaning toilets or whatever's available that Ive so far been probably avoiding, for a living if it means not seeing it trickle away.

Does anybody recommend I actually get professional financial advice too, for example from my own bank's advisor? I'm easily talked into things, that's all :/

OP posts:
Prosopopeia · 17/10/2014 12:21

Argghh! I just used a textspeak letter abbreviation by accident, I hate that!Blush Grin

OP posts:
LuckySaint · 17/10/2014 12:32

How about buying the children (and yourself) good decent Winter coats?
And you could buy a couple each for the dcs, in bigger sizes etc.
Have you got interview clothes?
Warm boots and jumpers for Winter?

I also agree about the little car, driving lessons, insurance etc.

But I wouldn't go to a bank's financial advisor, they'll try and sell you alsorts.

Discobugsacha · 17/10/2014 12:34

I would take the children to Disney in Florida for 3 weeks, buy a car and driving lessons and that will take you to under the threshold to keep your benefits.

Mintyy · 17/10/2014 12:37

I would spend a good chunk of the money on whatever talking therapy will help your depression. And maybe on a hobby that will make you very happy - perhaps riding lessons, or a good bicycle or sailing - anything that you really enjoy?

mipmop · 17/10/2014 12:46

I don't think you'll benefit from paying for financial advice. You may get ideas about protecting your money here or on the Money Saving Expert website. The salespeople in your bank will try to sell you products because they are salespeople.

Look into savings accounts that give instant access or a better rate for locking your money away for a longer period. By all means get leaflets from various banks or just look online for the best rates. Also consider premium bonds. You could open a cash ISA or other account and put £6k in it (or whatever the exact value of the lower threshold for savings affecting your benefits). View this as your rainy day fund or fun fund, but it's for the future, not for now.

As you live modestly anyway I would expect you don't want to waste the money, as well as being concerned about purchases being viewed as deliberate deprivation of assets. Maybe you could spend some on some good quality clothes and other items for yourself and your children. Maybe pay for activities- a holiday, day trips, swimming lessons or whatever your children would enjoy.

What would your grandmother like you to do with the money? I would imagine that buying some nice memories with your children (e.g. day trips etc) and things to make your life easier (like a car) and things to improve your life (counseling, training courses) would be on her list. But enjoy it.

TheresLotsOfFarmyardAnimals · 17/10/2014 12:55

Pay off all your debts
Get an emergency fund of three months money that you need to live - paying all bills and enough to feed you. This needs to be instant access but so that you have to go into a bank to do it, rather than a card as it's just too easy to spend it.

Do kit yourselves out a bit if you need to and a wonderful, huge food shop - including a couple of bits for the food bank!!

Try and get out of the awful things such as paying for bills on a prepayment card - this is punishment for those who can't get out of this situation and it will save you money in the future.

A car and lessons is a good idea but wait until you get a job and see if you need one - they're a huge expense, much more than the initial outlay.

I don't think you need to see a financial adviser in a bank. They'll just sell you an investment or an ISA and I don't think it's really what you need.

Iwantmyparcel · 17/10/2014 13:21

I'd buy yourself some little treats too.

TalkinPeace · 17/10/2014 16:36

OP
Clear all debts.
Put the maximum savings limit (£6000) into an ISA - good cash ones are around 3%

Put £1000 each into long term savings (not ISA) for the children : there are strict tax rules about gifts for Children, £1000 each and the authorities would be on v v shaky ground hassling you

spend the rest on

  • getting your licence and
  • a little runabout car as then you will be able to apply for a whole new range of jobs

I would not do a holiday : save that for when you get a job and can tell the DWP where to stick it.

Do not pay for advice : the combined experience of Mumsnet, Moneysaving expert and the Newspaper websites is better

MsBug · 17/10/2014 16:45

Fair enough that you don't want to study to do a degree, but is there any other kind of work you would like to do and if so can you use some money to pay fees for training?

As you won't be able to claim benefits, will you be able to spend your time how you like rather than looking for work (sorry I'm not sure how these things work)? If so, you could do some voluntary work or an internship to help you to find paid work in that area.

Could you put it in a savings account for your dc to use for tuition fees if and when they want to go to university (fair enough they will eventually inherit from their dad, but probably not in time for them to use it for University fees and he doesn't sound like he will voluntarily support them.

IsItMeOr · 17/10/2014 16:46

Nothing to add to the wise words above except good luck.

Pensionerpeep · 17/10/2014 17:00

This reply has been deleted

Message withdrawn at poster's request.

TalkinPeace · 17/10/2014 17:02

Msbug
Savings rates are below inflation.
£21k is not a lot of money in the big scheme of things.

You do not need to save up for children's tuition fees : the Government lends them the money and they pay it back in taxes.

OP
Please do not try to 'live on' that money : it will be gone scarily fast.

HaroldLloyd · 17/10/2014 17:40

I wouldn't see an adviser, there really isn't much point.

HaroldLloyd · 17/10/2014 17:41

Not a bank one as well!

Talkin peace had a sensible plan there, and cash ISAS you can easily find the best rate on the web.

DaisyFlowerChain · 17/10/2014 18:31

Deprivation of capital whilst reliant on benefits is taken seriously. You will be expected to live off the money until it reaches a certain level. Transferring to children's names will be seen as deprevation. A second hand cheap car won't be but a brand new one would be likewise a luxury holiday. Debts cannot be repaid in full from memory or bills paid in advance as both are classed as deprevation.

Each advisor will have their own interpretation so it's very wise to so them.

Is there truly no work of any form? If that's the case, then a fresh start elsewhere where there are jobs may be a better use of the money than a car.

TalkinPeace · 17/10/2014 19:13

Daisyflowerchain
How on EARTH can paying off debts be seen as capital deprivation.
That is insane and would not stand up for a second in court.

If you owe money on a credit card and have money in the bank you pay it off.

And its not "transferring to the childrens' names" it is giving the allowable annual gift under HMRC rules

TripTrapTripTrapOverTheBridge · 17/10/2014 19:16

As Daisy has said,you have to live off that money unless you have a job.You have to be careful and not fritter it away. 3 weeks in Disneyland is not a good suggestion and will not take you below the level as the DWP would see it as deprivation.

Don't try hiding it,wasting it,paying debts off aside from in normal payments,and don't give it away. They can treat you as if you still have the money and then you are in an awful position (there was one recently on MSE whose mother had frittered her inheritance buying 'stuff' and wasting it.Two years it took her,when it was gone-the whole lot went- she was turned down for going back on benefits due to deprivation of capital and them taking the used money as still being available -notional capital-even though it's gone..She has nothing and could lose her home).

They will look at your spending and decide what is reasonable and what isn't. Be careful with some suggestions on here,not only are they not wise at all but,actually,trying to give ways to deprive you of capital to gain benefits which is exactly what the DWP look for and are against.

The upside is that due to losing benefits you can feel a bit more free and flexible in your work choices.You can find what suits you and, don't forget, savings don't count for child tax credit and working tax credit purposes.

I'm a single mum to a severely autistic son and due to his issues and non existent sleep,school etc I haven't been able to work for a few years,gave up my career and had to live on benefits. I had thought of going self employed in a totally different area but was scared to as you don't make much to start with and you have to push things.Then one of my uncles passed away in April, when his houses and other things are sold I'll have around 40K shoved in my bank.The knowledge of that gave me the backing I needed to start my own business as I will soon have it to fall back on,I'm not restricted on working hours/pay due to state support,can work to fit my life and all with knowing there is the freedom behind it due to the inheritance! It also means I can enjoy the money a bit more rather than just carefully living off it.

Go to MSE if you want advice on what to do,you have to be careful or you'll screw yourself over

TripTrapTripTrapOverTheBridge · 17/10/2014 19:18

TalkinPeace paying off your debts in full is seen as deprivation of capital.You can pay it normally,but paying right off is a big nono.As is trying to get rid of money to get benefits,which is being recommended yet is EXACTLY what deprivation of capital is

TripTrapTripTrapOverTheBridge · 17/10/2014 19:19

Same goes for giving money to children