Savings in my name stopping Universal Credit despite low income

[slowingdown1]

can anyone more financially savvy than me help?
Recently divorced, ex DH pays minimum child maintenance. Have a low
income due to home working in low demand role so I can care
for 2 x disabled children. Yearly
salary is £31k before tax, I save £100 monthly into pension. I claim Scottish disability payments for both kids which go on private treatment / therapies. Each month I scrap by and have a constant low credit card debt despite my best efforts. I have savings that were gifted to me by my mum as long-term financial security of £80k. Although the money is legally in my name, I have made a firm promise to her that I will not use it, so morally I do not feel able to touch it until she is no longer with us.
My current income is low, but because these savings are in my name, they are preventing me from applying for Universal Credit as above
the threshold.
I understand I can’t eg transfer the savings into trusts for my kids as this would constitute deprivation of capital. I can’t ask my mum to eg take it back for the same reason.

I think I see the problem, the CAB advisor hasn’t been very clear; spending the £80k on reasonable things, like daily living expenses, is not deprivation of assets. In fact, DWP expects you to use your savings to pay for living costs until they are at £6k and then you apply for UC. Having navigated a vaguely similar situation with UC recently, I think it’s possible that paying a lump sum off your mortgage to reduce your monthly mortgage payments, then waiting to a short time before you then apply for UC is probably considered a reasonable use of the money. Deprivation of assets is about blowing the savings or deliberately hiding it, rather than using it for a sensible expense. It’s possible that paying £75/80k off your mortgage will bring the monthly payments down enough to make your budget more livable.

Sorry, if you are not breaking even you need to explain that to your mother and start using the money so that your debt doesn’t increase. Otherwise after a point due to interest rates you will end up wasting more money trying to pay off your debt. I am not saying wasteful spending but definitely use it to ensure you break even monthly. Most well off ppl don’t have 80K lying around in a bank so you definitely don’t deserve universal credit. Please stop being selfish and trying to claim, you need to use the money you have been gifted.

Everyone seems to think the tax payer should fund them these days.

£80k in the bank and you think I should work to pay for your life?

No wonder this country is so fucked.

You XH needs to pay for the family he created.

If you have the £80K in an interest paying account,(which you should), then you’re getting a decent amount of interest; are you using this to boost your income. I think most people would not be inclined to support your desire for UC.

My view is your mum gave you £80k to help with the care of your children. If you can’t provide what they need just now, then that is what you should spend the £80k on. It could be used to pay your mortgage and bring your monthly costs down….or it could be used to pay for the therapies that they need.

If you’re not spending the £80k, have you got it properly invested so that it grows with inflation?

Also, is your ex-husband helping with any of these costs? Surely he should be paying maintenance?

Whilst I appreciate it must be really difficult managing everything, at the end of the day Uc is for people you need financial help and you don't because you have 80k in the bank.

I think overpaying a mortgage is a good idea though if you can

So she gave you £80k for long term financial security - except your not allowed to spend it.

Were you not aware that you'd be basically blocking yourself from applying to universal credit.

Instead of long term financial security your mum has imposed present poverty on you.

Why cant you just give the money back to your Mum if you cant spend it? This isnt your problem, so transfer it to your Mum and then apply for UC. If they ask just say your it was your Mums and show when it came in and you sending it back? You could ask citizens advice first?

But you shouldnt be holding £80k for your Mum when its locking you out of UC. Arrange to give it back to her.

the playing the system bit is really unfair - why are you so convinced that early gifts are playing the system, and that inheritance tax on unplanned/unmanaged post death windfall is the right thing?

OP, i hope your £80k are yielding interests in appropriate accounts. You don't meet UC criteria, as you already know.

You won’t get universal credit with savings over £6k. It’s that simple. Use the £80k now a you need it and tell your Mum that you have to use it as you can’t survive on what you have. Use the money to pay off some of your mortgage off so you’ll have lower outgoings and you can use what you save on mortgage on your kids. Quite obvious really?

But that would be exactly what you are doing? Trying to spend it so you can get more benefits.

Just have the conversation with your mum. I know the money was for long term but it is stopping me being eligible for benefit payments. Im sure she wouldn’t want you to struggle when you have the means not to literally sitting right there

This country is ridiculous!!

OP has £80k of savings and still expects the small proportion of “net contributors” to pay for her 😠

Benefits should be a last resort not a way of life!!

Spend the savings, then when you have nothing left, use benefits to get you back on your feet to a position where you hopefully don’t need benefits!!

It’s become a way of life in the UK!! We’ve allowed a system where people get free money as a lifestyle.

I’m fed up of paying for other people. I currently “sponsor” whole families from my tax bill and I just don’t want to anymore.

Put your own 'Oxygen Mask on First'.

If the tax payer gave you 80k, you would be thrilled. But spending 80k of your own money is such a big issue.

I hope it is in a high interest account as it will be increasing by 4k a year. Even better, if it is invested in a stocks and shares isa, it might have gone up 22% in the last year, so be nearer 100k.

Spend 1k a month to top up your income. It will last around 8 years and make you and your children's life immeasurably better. Don't be afraid to spend it on necessities. But money makes money, and 80k is massive and can keep your family afloat for years. It was a very generous gift from your mum and she would be delighted that it is making your life easier.

Watch the Rebel Finance school videos on youtube to help you plan your OWN financial future. It will be life changing.

UC doesnt exist to allow you to preserve your savings.

You can spend it, gradually to top up the gap in your budget, then will eventually becomd eligible for UC. But you dont want to do this.

The while reason UC won't be given if you have savings is because they will expect you to use it to pay basic outgoings. It's not difficult. The CAB advisor was so wrong. Mortgage and essential bills are not deprivation of assets! You will have to use it to live off if you're struggling.
It's actually very simple

Reading more of the thread...lets say...

Scenario 1 (current) - you have £80k in bank, and not allowed UC

Scenario 2 - you dump £75k into your mortgage - after speaking to current mortgage adviser or using London & Country to get new lower rate. Youve took yourself under £6k and still not allowed UC

Scenario 3 - same as no.2 but you make a successful claim to UC

In option 2 you have reduced mortgage payment. In option 3 you have reduced mortgsge payment and UC. Both better that current option 1.

Do you have welfare rights in your council?

Have you asked chatgpt having a long conversation with it to give it all the info it needs to properly advise you?

OP I think the best you can do is place the 80k in a fixed term isa, one which pays out either monthly or yearly. You could make an extra c. 4k a year this way which would likely pay down your credit card debt and eventually you would have that cash to play with.

As a former benefits assessor (until 8 years ago) I think CAB have given you duff advice here. You can pay off debts, including your mortgage, without it being deprivation of capital. Even if it was deprivation, and you still didn’t qualify for UC, you’d obviously still be better off clearing your debates and paying down your mortgage than having debts and a load of unuseable savings.

My only suggestion is to use that money to buffer yourself for when you do need to rely on UC, eg, upgrade to new and energy efficient appliances, newer car, aids or adaptations for DCs if necessary and pre pay as much as you can to keep future costs down. Surely you DM would consider this responsible use of the money given the circumstances?

If your mortgage / house deed is in your name only surely you use to it reduce your payments significantly - thats not asset deprivation in UC terms. Or pay for a years worth of disability therapies in advance and recoup the cost that way.

No wonder Britain is broken.

If you have £80k for "financial security" you don't need benefits - a safely net for those who don't have "financial security".

If I make a "promise to myself" not to spend my salary can I claim benefits too?

The entitlement of the British has gone crazy.

Invest the 80k so it brings you some income.
I had a spare amount similar and bought a studio flat; I renovated it and now it’s rented out for about €500/m.
Could you do similar? You’ve still got the asset then aswell. There’s no point in 80k sitting in your account doing nothing..

Paying off debt including mortgage debt is not deprivation. On old style benefits there was an issue with paying off debts that weren't due. UC is more generous in this respect.

Does your ex not contribute financially towards his children?