On benefits, due a sudden lump sum of 40K, what do I do?

[AllBranEater]

The council have just sent me a letter saying that they've been overcharging me for a contribution to my care costs for 10 years, so they need to give me just over 40K back. Obviously I will have to cancel my employment and support allowance, housing benefit and council tax reduction, but I think I get to keep my PIP?
I've done a budget, and with only PIP as income I will have an annual deficit of £10,448.26.

I am also aware I might think of something(s) to buy with some of it, whilst thinking about deprivation of capital in a few years time.

So I'm wondering what to do in terms of saving it. I think that I need to keep £10K-15K in instant access, but I'm not sure? The rest I might be able to put in an account where you lock it away for a year for higher interest, or with limited numbers of withdrawals?

Any thoughts appreciated!

Yeah I would get some advice. I know some compensation monies are disregarded by benefits. This may well be also.

I just wanted to say thanks, I've joined that fb group. My local benefits advice charity said the money wouldn't be disregarded because it's not a benefits underpayment. But the CAB said it's complicated and they may need to seek external advice, so I'm waiting to hear back from them. I have opened an account at a building society with much better saving rates than my bank, so just waiting for all that to come through.

I'm glad you’re getting some good advice and I hope it all works out ok for you.

That's good news - that CAB are seeking further advice - it doesn't strike me as a straightforward situation. All the best

I hope it works out - fingers crossed