Recently redundant single mum — UC/JSA, savings from house sale and possible property purchase

[Devongirl123]

Hi everyone,

I’m hoping for some advice as I’m feeling quite stuck and overwhelmed by my current financial situation.

I’m a single mum with a nursery-age son and I’ve recently been made redundant. I’m actively applying for jobs and recently came very close to getting one that would have been life-changing for us, but sadly it didn’t work out.

At the moment, I’m not eligible for Universal Credit because I have around £70,000 from the sale of a house after splitting from my ex-partner. I completely understand that this counts as capital, but the difficult part is that this money feels like the only real chance I have to get back on the property ladder and build a secure home for me and my nursery-age son. I don’t feel I can simply live off it until it disappears, as then we would have nothing left to create any long-term stability or housing security.

I’m also not eligible for contribution-based JSA because in the 2024–2025 tax year I only earned around £10,300 through employment and only paid about £53 in National Insurance. I also earned around £2,500 from self-employment, which I declared, but I haven’t yet paid National Insurance on that as it wasn’t automatic.

My current income is:
• £600 per month child maintenance from my ex-partner
• £180 per month interest from my savings, if left in for the year
• Child Benefit of around £28 per week
• I’ve just found a small amount of work, but it’s only 5 hours a week, around £60

I also have around £6,000 in my current account as a safety net to keep me going while I’m desperately looking for more work.

My rent alone is £1,000 per month, and bills, food, car costs and general living expenses are roughly another £1,300 on top of that, so I’m burning through money quickly.

The other part of the situation is that, with a good friend, I’ve seen a small property in a great location at an amazing price — around £70,000 — going to auction next week. It may go for more. It’s about three hours away from where I currently live.

We’re considering buying it to renovate and either sell on or possibly rent out. There is also a chance it could become a home for me and my nursery-age son, although it would be a big move. My friend is a carpenter and experienced home renovator, so he would be able to do a lot of the work.

It feels risky, but also potentially a really good opportunity. The property is small and manageable, and realistically there could be a decent profit in it. However, buying it would take almost all of my savings, apart from the £6,000 I’ve kept aside.

My questions are:

1. If I used my savings to buy a property, would I then potentially be eligible for Universal Credit, or would this be treated as deprivation of capital because I had deliberately spent the money?
2. If the property was being renovated and wasn’t immediately liveable, would it still count as capital for UC purposes?
3. If it became my home, would that change how Universal Credit viewed it?
4. Is there any way to top up my National Insurance for 2024–2025 so that I could qualify for contribution-based JSA, especially as I also had declared self-employment income that year?
5. Are there any other forms of support I might be missing as a single parent with a nursery-age child who has been made redundant, but has savings that are meant for future housing?

I’m trying really hard to make sensible decisions and not waste the only money I have for mine and my son’s future. At the same time, I’m in quite a vulnerable position right now with very high monthly costs and no secure income.

Any advice would be really appreciated, especially from anyone who understands Universal Credit capital rules, deprivation of capital, JSA/NI contributions, or buying property while out of work.

Thank you for reading.

I thought proceeds from the sale of a house were disregarded for a certain time period (maybe six months?). Using it to buy a house would not be deprivation of assets.

Sorry, not much help but hopefully others will come with better answers.

To buy a house to live in yes, but not one your going to sell on and use as profit that's not allowed.

You cant have it both ways.

Yes, of course, duh on my part. But too late to edit my response, so I'll just have to live with looking like a dummkopf.

If you purchased the house to live in you would probably be eligible for UC but bear in mind they won't give you any money for housing costs so you will only get the standard allowances for you and your child

Pretty sure buying it to sell on/rent out would be considered deprivation of capital and does show you are not in real need if UC when you have £70k to cover your living costs while you get a new job. Even if your outgoings are 3k a month you can support yourself for nearly two years (which you probably wouldn't need to as you say you are looking for work)

Any rental income will also be taken into account for UC calculations so you will probably not end up with much.

Sorry to hear about your job situation. Are you able to reduce any of your outgoings for the time being? What does the £1,300 include? I would trim as much as you can over the next few months to make your savings stretch a bit further.
I appreciate you don’t want to use your savings, but that’s what they are there for. Hopefully you find another job soon.

You should qualify for contribution based JSA based on the figures provided. You cannot top up national insurance in order to claim as contributions must come from work ( class 1).

First Condition: You must have worked and paid Class 1 National Insurance contributions on earnings at or above the Lower Earnings Limit (LEL) for at least 26 weeks in one of those tax years. The LEL is £123 a week.
Second Condition: You must have paid—or been credited with—Class 1 contributions on earnings of at least 50 times the Lower Earnings Limit in both of the last two tax years. This equates to at least £6,150 (50 × £123) in both years.

Is there any spare income you could generate in nursery hours, dog walking for example?

Personally I would stay away from house renovations plans, they always cost more than expected and you would need a decent contingency to be safe, so that would be a huge risk. Buying for yourself is different as long as you had enough to make it habitable before running out of money as you could then claim universal credit and would have reduced overheads.

Good luck - it sounds like you're in a tough spot.

If you buy a house for you to live in then it should be ok, but you won’t get UC if you buy a rental/don’t live in it. Where the other £1300 a month going? That’s high outgoings, what can you reduce? Can you take any job for now whilst you look for a better one?

The reply above is insightful because I also thought you could be entitled to claim NS JSA, so you should check that.

Have you had any contact with Citizens Advice for a benefits check and to answer these questions?

https://england.shelter.org.uk/housing_advice/benefits/can_you_get_universal_credit_if_you_own_a_property

It’s fine to buy a property with the £70k but it’s expensive to renovate properties these days. Also, mixing business with a friendship rarely works out and houses at auction mostly sell for more than the guide price, especially if they’re in a great location like the one you’re thinking of buying.

I meant to add it’s fine to buy the property but as others have said, only to live in.

Also, you will be asked to provide bank statements as part of regular reviews, if you go into claim benefits.