Inheritance and Benefits

[Mummyto1crazy1]

Small background info.

My partner lost his dad. The house has been sold and split even between him and three siblings. OH is still in absolute bits after the loss, they where extremely close. He is at the stage now he doesn't even want the money. His dads wishes was that the grandchildren get savings. 2 of those are our children.

I am trying to do the logic thinking on behalf of my OH. We currently live in concil housing and receive help with rent. OH works but I don't due to disability.

I have 2 questions:

Can we open accounts and put money in for our children for when they turn 18, and will this affect my benefits?

We don't have a joint bank account but obviously a joint Universal Credit account. OH isn't on great wages. If we were to have over the £6000, how much would this affect our benefits? It wouldn't be over the £6000 for long. We are wanting to get married and also need a new car.

Any info on this would be a great help. OH is at his wits end with everything and I am seriously worried about his mental health.

Quick answer .. unless the will left the money to the grandchildren, putting it away for then is deprivation of capital. Savings over 6000 and under 16000 will mean a deduction from benefit each month for assumed interest. Was 4 ish per 250 pounds I think but may change next week

I think it's about a £1 per £250 quid per week so £4 per £1000 over £6000. As of current rates it goes up a few pence after April new tax year

Op you lose benefits over £16000 savings.

With housing benefit each local authority has it's own rules depending on what legacy benefit you're on.

Are you receiving any other benefits?

You have to let them know.

How much is being left? Unfortunately if it wasn't left directly to the grandchildren in some sort of trust it will be classed as household income.

But you say it will go down to less than 6 fairly quickly. Depends where it's going.
Valid reasons new white goods, update car.

Oops I meant per £250 it's £4.35

Sorry pp.

You're right

Defer your receipt of the money by putting it in your pension

https://www.gov.uk/universal-credit/changes-of-circumstances

I would suggest if you need a new car, buy it

If you want to marry, do it

Does these things while you have spare money

Put your money into an easy access tax free savings like an ISA that pays 4 or 5% interest

See info about change in circumstances

Can we open accounts and put money in for our children for when they turn 18, and will this affect my benefits?

yes it will affect your benefits as the benefits will stop if over £16000 and then if under £16000 you can reapply but the benefits will be reduced. The benefits can also request receipts of what you have spent to account for all the money that has gone from your account.

Its as pp states - deprivation of capital if you gift to your dc, and would really complicate your benefits. If the person had left the money in the will directly to the children this wouldn't have been an issue - but if they didn't then this is an issue.

You need to inform U.C. about the money you are about to receive, that is what you signed up to.

my advice would be to buy a new car, buy new whatever and then keep all the invoices, receipts etc so that you can show where the money has been spent. Any decorating, building work etc, keep every single receipt.

Paying off any debt if you have any, is not counted as deprivation of capital - this might be the first port of call. This could be bills due - (pay your upcoming council tax in one lump sum for instance? Any utility bills upfront? TV licence?).

Investing the money into pensions for you and your OH will be disregarded for UC. If working you can invest up to your net income.
If not working - up to £2880 each tax year, which will be topped up to £3600 with tax relief (even if you don’t pay tax).
Simple pensions are very easy to open and manage yourself online.

It would seem like a good way to provide some future security for you both. It sounds as if your OH dad was prudent with money, so following his example might be a way to utilise it wisely.

Thank you all so much for taking the time to reply. I really do appreciate every post and all advise.

We will be reporting it to Universal Credit once it comes through. In the will it was left to the 4 children, and father in law (thats what i seen him as, even though arent married yet) just verbally advised its for grandkids, so it's not in writing.

I just wanted to find out information as my OH is in a bad way at the minute, so all advise is taken into account. We are in the process of decorating and have just purchased a new fridge, which is on an argos card. So would that be taken into account if we payed that off and we do need a new car and also wedding.

I think setting up a pension also sounds like great advise.

We just want to make sure, that we are doing everything correctly and declaring it all.

Was just because we will be spending it quickly, working out how benefits will be effected was confusing me.

Thanks again to everyone for advise 👍

Honestly get your bank balance down legitimately from now on.

Stave off the money coming in for as long as possible.

you could also pay a month or two extra on your rent account if you rent from council or HA, again being prudent for a raining day, this will not be seen as deprivation either

Paying off debts is fine, you can give some money to your children but check the limits before it counts as deprivation of assets (I think it's £3k per year). As far as your wedding, obviously paying some money is fine but if it was a large sum they might count it as deprivation of assets. Ditto car is ok, but really expensive car not and so on.