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.

Or...hear me out a second...be mad at the government for not paying people a living bloody wage 😂 you have a very warped view on life and society and I do hope you get better soon.

I'm sure the care staff that will be wiping your bum and feeding you your medicine when your children inevitably throw you in a care home will have VEEERRYYY limited skill set and low entry threshold and will also be on UC. As will many people who you will cross paths with in life.

It is a MN thing. People who do the vital jobs are failures.
It is vile.

I can already taste it...bitter as hell 😂

Where do you think the government gets the money to pay living wages to public sector workers?
from taxes

if lots of people decide they want an easy life with part time job topped by the UC because it’s so much nicer than “working to an early grave” what do you think happens? Tax receipts decline -> less money for public sector and for benefit claimants (even those who really need them) -> salaries get even worse etc etc

Inheritence shouldn't make you worse off financially. It's yours to do what you want with it. If the numbers don't make sense to buy a house, don't do it. Don't buy something you can't afford, you're family hasn't done the math. If your rent is covered that's wonderful. Not to mention, it's good to have an emergency fund as well as a down payment. There's also no rush to buy, invest some of it so that it can grow. Maybe when your daughter's older you can work more.

Weird logic there.
NHS are public sector. Their whole wage is funded by tax payers. I dare you to tell a surgeon he is a "scrounger" and wants an easy life.

Again, tell us how a TA is a scrounger.

GrillaMilla in this economy how far would you expect under 12 grand to last?

Yep, some lenders will include, a lot don't.

OP, speak to a free mortgage broker to find out your options.

If it's not possible then go on hol, get a second hand car and save 6k.

I think you should consider your family financial security ahead of your daughter's. What I mean if you pay off your debts first, then buy a decent phone and/or computer, get decent furniture which will last, good bedding, desk for your daughter's room, lighting, fridge, cooker etc - it all will all make HUGE differenve to the well being of both of you. Decorating your house in bright cheerfull colours will be lifting your mood every day. In long term you both will be glad thst you have beautiful, safe and secure house to come to.
Your council house IS yours.
Nobody is going to throw you out of it.
I think over all that is money well spend, on useful and sensible stuff which will last. You won't be working part-time forever.
Or you can put qlall that money towards your pension and your UC I believe won't be affected.

I’m not telling this to a surgeon though? Is a surgeon working essentially part time and claiming UC? No.

TAs are not a necessary component of successful education. Plenty of countries educate children without a TA in every classroom, and do it very well (better than Britain). Specific one-to-one SEND support may be worth it. A generic TA in every classroom is not something that’s really necessary.

What is your job?

Just ignoring all the trolling I would sit down and seriously work out your income, outgoings etc.

In your mind you are losing x a month.

Now work out how much you are saving a month; or could maximum save, and work out how long it would take you to save that 12k.

The reason I say that is you may never get an opportunity like this again.

Sometimes we have to ‘lose’ money for a period to make gains in the future. I did that when I worked for a loss when my youngest was in nursery.

Get ChatGPT to help you run the numbers on various scenarios.

Sorry for your loss 🌷

But you're lumping in tax supported salaries in one...so you are basically saying that to a surgeon and other jobs like it.

SEND support MAY be worth it? 🤣 I would love for you to step foot in a classroom with a class that has 2 children that need extra support and see how long one teacher can last. You'd be moaning that your children aren't getting a proper education because there's a lack of support staff.

Take your littlin on a holiday, enjoy a well earned break and take your time to think ahead.
So many haters on here!

Pay off car and any other debt-Pay for a year of insurance and tax if you can.
Get as much sorted in the house as you can with the money so it's really nice.
Go on a nice little holiday.
Put the other £6k in an ISA and forget about it but you'll really appreciate knowing it's there if you need it.

1st, don't put the money in a LISA if there's any possibility you're going to need to use the money for something that isn't a deposit on a home (which is likely if you're on UC) as there may be penalties if you withdraw the money for other purposes.

2nd, if you want to put some money aside for your daughter, it might be worth having a chat with the executors before you pay the cheque in, to see if it's possible for them to issue 2 new cheques instead, one to you and one to her. Otherwise transferring the money from your account to hers might cause you "deprivation of capital" issues. It might be too late for that by now, but if you don't ask, you don't get.

3rd if you're happy in your council house, don't feel like you must spend the money on putting a deposit down on your own place. Your Nan will have wanted you to have a secure home, and a council place is that, and I'm sure she'd have been just as happy with you spending the money on making your new home more homely. It's a good idea to get advice about what's allowable expenditure before you blow a lot of money on a new kitchen etc, but repairs and maintenance are fine. Take before and after photos and keep the receipts just in case someone at the DWP decides to be an arse about it.

4th don't be afraid to blow a little bit of money on something frivolous as a final gift from your Nan, something that makes you smile remembering her.

Hi OP. If you put money into an isa it will be counted as savings.you are allowed 6k in savings. Anything above that, a certain amount will be taken off your UC. Anything above 16k, UC stops.

Please do research on what UC would class as deprivation of income.
Things like transport, upgrading household items, a reasonable holiday etc are fine. Lavish holidays, or giving money to your children, can be classed as DOI.

12K is a lot of money, but in my opinion, it's not enough to buy property and pay for everything that comes along with that.

I think your plan to pay off your car, upgrade your house/garden and have a little holiday, but keep some in an isa is a really good idea. But as I mentioned, please be aware of the deprivation of income rules.

So sorry to hear about your Gran passing, but enjoy having that little bit of financial freedom for a while <3

Paying off debt will put you in a more secure financial position. From there, look to see how much you legitimately have to invest in yourself to not lose benefits or to only lose them for a short time.

being debt free, even not having a car payment, would be an excellent use of your grandmother’s gift.

overextending yourself to buy a house you can’t afford is not wise. It’s a great way to spend a larger portion of your life needing benefits.

You can actually… not much, but you can. The first £6K are disregarded.

Meh. I'd be getting a trusted family member to look after the money for me.......12k is fuck all these days. And the 6k benefits limit is stupidly low too.......hell I ended up on benefits for a few months around 30 years ago and it was 6k then !!

Please blank out and ignore any of the ‘benefits haters’ on here.

For the very rich there are so many advisors and accountants who help them hide assets and windfalls while taking advantage of all the government tax schemes to their benefit.

I wish there were more services available for your end of the spectrum which would help you maximize an inheritance for the long term benefit of your family too.

I’m not a financial advisor but I would recommend you get some professional advice about what you can spend down on the inheritance balance without it affecting your current benefits.

Pay off all debt.
How much in savings can you have? It’s a nice idea to put something away for your DC, but also being able to have an emergency fund to manage things like car breakdowns etc
Make your current living space better.
Is there any training you can do to improve job prospects?

Don’t give up your council house for an expensive and risky mortgage at this point in life.

Work on improving your income, savings, and look ahead to any future buying opportunities.

Honestly OP, why would you expect other taxpayers to fund your UC when you have £12k in your bank?

You lost me at “holiday of a lifetime” to be honest.

I saw the thread title and groaned inside, as i knew how it would go.

People who've never had to live on benefits have no clue how soul destroying it is.

And that if you're fortunate enough to receive a bit of inheritance, you have big hopes that it will change the rest of your life and get you off benefits. But it doesn't take long to find out that it won't. You just have to use it all up then go back onto benefits.

A lot of MN users don't seem to recognise that not everyone can get decent paid jobs around their childcare options. That a low paid school job is often the only available option (not sure if anyone has said it's a pt job, as that normally appears). Without acknowledging that our education system would break down without people, mostly women, working these "pt" jobs and having the benefits system prop up their families.

I have no practical financial advice for you @Stressedmum6761 . I just wish you well finding the best long term use of your gift that your nan was hoping would give you a little more financial freedom.

Editted to say that i have an excellent charity in my town that offers free financial/housing advice to people on benefits. Have a look to see if there's a similar charity in your town.

You’ve spoken of debts a few times…can you elaborate? You mentioned a car payment—how much remains, and what is the interest rate? What else is there, and what are the interest rates of those debts? Do you have an overdraft?