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.

Your mum gave you the cash about 7 or 8 years ago so you wouldn't struggle for money in the future. Roll on 7 or 8 years and you ARE struggling financially so the criteria for spending it has kicked in. You are not going against the spirit of your mum's wishes by using the £80k to help support you and the children. The fact that she's not dead yet is frankly irrelevant if the other criteria for using the money has been met. What if she lived to 100? Use the money to make your life more comfortable now and don't feel you are going against her wishes. Presume she put the stipulation to wait on so you didn't go off and blow it on a fancy car or luxury holidays at the time? Stop looking at UC to fund your financial shortfall when you have the means to solve your own problems in an instant. You were given money for a rainy day and now metaphorically it's pouring, so use it!

I wonder if the mother has the £80k ‘resting’ in her daughters account so that she can claim UC ???

On your income but you have money! You don’t want to spend your own money but want the rest of us to give you ours?

You wouldn’t be back at square one though if you pay off your debt and put rest in the mortgage, even if you couldn’t then claim UC at least you’d have less debt and lower mortgage payments so your monthly outgoings would be significantly lower.

You cannot claim UC with the money in the bank so you may as well spend it on things which will make your outgoings lower, even if you still won’t be able to claim UC when it’s gone. It makes no logical sense to have that money in the bank whilst simultaneously getting yourself into credit card debt!

Audacious, isn't it?

Pay for your own kids.

Having googled it, it looks like you can use it to pay off debts so pay off your mortgage. This is staying within your mums wishes by having security for yours and your children’s future. It also frees up a large part of your monthly income thereby negating the need to apply for UC. I am sorry about your mum, a loved one with dementia is a hard journey.

So you have 80k in your savings account for 8 years? Will your ex be entitled to half if you have split up?

How much did your mum give you 8 years ago because it must have a hell of a lot of interest added and anything over 1k a year is taxable, so you may end up having a tax bill (unless it in ISAs). All banks are required to tell HMRC about all interest added to accounts. HMRC knew to the penny how much interest my son had earned last year when he was sent a new tax code by HMRC.

This 👆👆👆

You are NOT on a low income OP.

I was on UC (and other benefits).

My father died in January, he left no will so I got half of what was in his bank account, it was a lot less than £80K.

So now I have lost the income from UC so my month to month income is less than the government say I need to live. Things like council tax and visits to the dentist have gone up.

BUT I have some money in the bank. Those are the rules.

I am keeping meticulous records of money I spend in case I need to claim UC again.

If you paid some /all off mortgage depending what you owe - you would then have that extra money each month to play with

I would def look into a wet room as this is something that makes your life easier and as your kids get older and stronger and heavier the hoist sounds like it will keep breaking

Your mum gave you the money to spend caring for your children, so why can’t you use that money now for therapies they need? Your mum won’t begrudge you that. Your brother won’t think badly of you. Nobody else needs to know.

I would also get a second opinion on the deprivation is assets, as sounds like the advisor has not explained it properly to you, or likely, hasn’t understood it well enough Themselves.

This isn’t really how that works. They key thing with deprivation of assets is that it’s deliberate. This would mean (for example) spending it all at once on a new house then claiming UC, or going on loads of holidays in six months then claiming. If you were to spend it gradually and there was a clear pattern (I.e. if you’re using it to pay your mortgage for two years) then this is not deliberate deprivation of assets. The thing with that is that it would be “frittered away” and it would be over a period of time. You’d essentially need to prove that you have to dip into this money in order to live and that once it’s gone you need UC to replace it. You could potentially get away with investing a small amount for your children, but certainly not all of it.

I appreciate that you’re saying your circumstances are difficult based on your mums wishes, but as others have said, you’re actually in a very fortunate position. Many single parents don’t have £2k a month take home pay and the vast majority don’t have £80k they’re sat on. It’s unfair for taxpayers to fund you when you have this money, regardless of how your mum felt. In any event, I am assuming she meant “don’t spend it on silly things” and that if she knew it was to pay the mortgage as you’re struggling that much, she would surely not begrudge that.

I do hope you get sorted eventually op, but there’s no quick fix easy answer

Fritter away fair enough, but if you need it to get by monthly I don’t see how that could be classed as frittering.

Maybe don’t get advice from CAB then? £80,000 is a lot of money, she could get financial advice on investing it. Or get advice from UC itself regarding benefits which she clearly didn’t want to do as she would have to mention the savings.

you say it feels morally wrong to spend it. It’s also morally wrong to get taxpayers money when you don’t need it @slowingdown1you’re one of the ones who give benefit claimants a bad name and MN has people benefit bashing.

OP the way you need to use it is to stop yourself going into debt each month and use modest sums to make your life a bit easier day to day - if you are a week away from pay day and running short of money, dip into the savings. No it isnt want your mum 'wants' you to do with the money, but thats tough. Its preventing you from accessing UC because what UC would give you would be that bit extra each month stopping you from going into debt and theres no reason you cant just get that 'bit extra' each month from the savings.

You know the UC savings rules which are very clear on maximum amount of savings. You know why you can't claim and keep your savings intact. You could have turned down your mother's money but you didn't . You can't just give it back ( deliberate deprivation of assets) but you can pay off all or part of your mortgage and other debts with it and use it for normal living expenses. The CAB were wrong to imply you can't spend any of it. Perhaps they were trying to explain the deprivation of assets rule but did it badly.
You can't have that level of financial security and expect to claim universal credit on top. Once you've used your savings, you may become entitled to state support again

I feel sorry for you OP. If this is what you think being poor and needing UC is, you’ll have a massive shock if you ever get to that point.

£80K is a massive amount of savings and £31K for a job that allows you time with your kids is good.

Your circumstances sound really hard and I understand why you may not want to draw on the money now. But you have £80k. I don’t think UC is designed for when individuals have a large sum of money that they would rather not spend, even for good reason.

You can use it to make your life better now? I know you promised your mum, but your situation has changed. I will always staunchly defend the right of people on low incomes to access UC, but come on, how is it moral to expect taxpayers to fund the bill if you’re sat on £80k just because you don’t want to use it. Use the money to sort your finances out, pay off your debt, maybe invest a little, give yourself an additional monthly allowance as a buffer and then, if you find yourself in tough times, you can look again at claiming.

" I could break that and use to it pay mortgage and health bills and a new car and run it down but morally it feels wrong and legally I’m fairly sure it’s asset distribution."

But you don't find it morally wrong to sit on £80k and claim benefits that have come from tax payers earned salaries? Gotcha. 😑

Fucking unreal.

And no it wont be considered that you 'still have it' by UC if you have used it slowly over many years to top up your monthly cashflow to prevent yourself regularly building up debt on credir cards. Thats not frittering an asset. What would be frittering an asset would be choosing to suddenly go on lots of big expensive holidays, treating yourself out of the blue to a swanky new car bought outright etc.

The savings suddenly dropping from 80k to 16k in like 1yr to access UC would attract attention into what you spent it on.
You giving yourself 200-300 each month from the savings to ease your financial situation and manage a bit better day to day, is what you should be doing. Pay for unexpected costs from the savings rather than expecting to cover them from monthly income and ending up with a really tough month when you have to pay the car mot for example and theres extra stuff on there. £80k could make your life more comfortable for many years in this way, thats what you should be doing.

Agree.

‘Morally’ doesn’t come into it, you have £80,000 so you don’t need benefits paid for by tax payers to cover your costs, because you have £80,000 you can use to cover your costs. If anything it’s morally reprehensible to think everyone else should fund you when you have that much cash.