Inheritance while on Universal Credit: what are my options?

[Stressedmum6761]

Hi everyone! 👋 I'm currently losing my marbles and need to speak to anyone who's been in the same boat.

My nanny passed away nearly 2 years ago now and it's taken a while for her things to be settled and sold etc. My family passed me a letter today addressed to me from my sweet, beautiful nan and a cheque for nearly £12K. I've been in absolute bits all day I keep bursting into tears. I've never had this much in my life and never ever expected anything from my nan at all and it's absolutely thrown me.

The thing is I know I should be absolutely THRILLED with this money, I'm on my own with DD who's 6 now. We've just moved into a council house 2 months ago and I'm on UC top up which also covers my rent, my job doesn't pay well but it's a school job and I get my holidays off with DD. I'm panicking more than anything because I know that as soon as I cash this cheque UC are going to deduct money each month (about £120 if my maths is correct).

My family said they know nan wanted me to put a deposit down on a house, which again I know if I get a mortgage my UC stops and I'm financially liable for the payments and any repairs etc if anything goes Pete Tong.

I'm thinking about just putting most of it in a LISA for now and potentially in the future buying a house...maybe a once in a lifetime holiday with the rest. I'm just torn because if I buy a house, I'll be so much worse off than I am now getting help from UC with rent payments etc. I've just moved into this house and started decorating and making it my own. I'm worried about the money sitting there and me being so scared to spend anything while also having money deducted from my monthly payments. Again, I'm absolutely ecstatic I've got this chunk of money for security but the fact that it's going to effect me whether I spend it or not is flapping me to the core.

What do I do? Has anyone had experience with coming into money while also being on benefits? Thank youuu from a very emotional and stressed mum.

Surely you will just have to accept that by cashing this cheque you will have slightly reduced benefits until you’ve spent it all?

Also I’m not sure where you live but wouldn’t £12k be a drop in the ocean compared to what you need for a deposit ?

Im sorry i understand your predicament but I also find it ethically wrong

I don't think your UC will stop if you get a mortgage, but I am not sure you will be able to get a mortgage on UC. There may be lenders out there that allow it, so it is worth looking into if that is what you want to do.

Ethically? How so?

Unfortunately benefits are supposed to be for those who are in genuine need. If you've been left some money, then you are in a position to support yourself. That's only right surely?. .If you've got 12 grand in the bank it's only right you use it to support yourself.

I understand that part. And I could get a small house here for about £110,000.

I mean the rental part of it, they cover my rent at the minute as its a council house but if I get a mortgage I would be rightfully so liable to pay the payments in full on my own. I also didn't think about the fact that lenders may not lend to me tbh thank you for pointing that out, I really do appreciate it 🙏

But you’d still need more for a deposit ? And solicitors fees removals etc. Anyway, 12k is supposed to be instead of UC not in addition to it.

Well thats rhe ethical part. This is a deposit. Use it for that and let someone ib actual need have a council property

That is true, but using an inheritance to put a deposit on house is allowed and not seen as Deprivation of Capital. OP will free up her council property, and wont be claiming the housing element of UC.
It is not a case of you are absolutely not allowed to spend any windfall on anything apart from living expenses. You can get a new car (obviously not a Ferrari) and go on a family holiday (not a round the world trip).

Maybe she means the housing element stops. There is very little help for people with mortgages - home is an asset.

I understand that but how long could I support 2 people on £12K? I'm not having a go but once that money has been spent on supporting us both I'll be right back where I started...on benefits.

But how would the op afford the mortgage?

Yes, that’s exactly how it works..benefits when you need them and they reduce or stop when you dont.

Yes, you will no longer get the housing element. But you will be able to earn more before you get deducted 55p per £1.

What if you used it for education/training so you could have a better paying job/more options?

I understand what you're saying on that front but if you also read my post, my job doesn't pay well. I'm unsure I'd be able to afford the mortgage repayments alone, plus the fact I've already sunk money into redecorating the place I've just moved into 2 months ago. I'm not about to drop everything and move out just because I found out about this money a few hours ago. I was just asking for advice.

Well stay put then but you still need to declare your change of circs and your UC will be reduced?

So I guess what you need to work through in your head is:

1. If you bought, how much would the mortgage cost you each month, and could you afford that? If you couldn't then that option is dead and you can move on.
2. If buying isn't viable, is there anything you need to do to get your council property up to scratch? I understand they often come without carpets, white goods etc. That could be quite expensive but also a good investment in your future if you're going to stay there for a long time.
3. Do you have anything sitting on credit at the moment that needs paying off? Hopefully not, but if you do, you should pay it off.
4. Are your transport needs met? E.g. do you need a bicycle or anything like that to help you commute to work?

So basically, use it to secure your future but in sensible ways that don't risk you being accused of abusing the system.

I'm sure I'd have people telling me I should of invested the money and used it wisely if I was posting about spending it all on living expenses and was back on benefits 🙄 damned if you do damned if you don't in this world.

if I get a mortgage I would be rightfully so liable to pay the payments in full on my own
So youre getting high and mighty about feeling strongly that people who have mortgages should be paying their way, but you meanwhile should feel relaxed about having the taxpayer pay for your housing while you inherit five figures?

You can have £6000 in savings before you have to declare it. You could use the other 6k on decorating and new furniture for your new house.

Do you have any concept of how much things cost? First off if your info’s so low you probably won’t get a mortgage. £12k won’t be enough for a deposit and all the costs involved and you certainly won’t have enough for a once in a lifetime holiday

You can check with turn2us or your local cab but they allow £6,000 of savings; you are also entitled to spend your capital (so the other £6,000) as long as it’s not frivolous, I believe. So a new car, maybe a holiday, things you need or maybe you can invest; they will take any interest or profit into account as earnings. Check with a benefits advice about acceptable spendings. You may also be allowed to put a chunk into training etc so you can improve your qualifications and earn more over time, I imagine your nana would be happy for her help to go that way x

Well not really damned if you do: you could put the money down as a deposit on one of the 110K homes available in your area and get a better paying job, albeit one that doesnt allow you holidays with your DD. As millions of mothers in the country do.