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.

Just be careful OP as UC may be aware of the money and may temporarily reduce your benefits. What’s the max you can have now?

All these comments are wild though. 12k isn’t a huge amount of money at all and wouldn’t mean OP should give up her council house and buy one. Of course she needs to bear in mind that she could be worse off.

I needed top up benefits for years when my kids were young and I had a very serious health issue meaning just keeping hold of my job was tough and I had to go part time so needed top up benefits to pay my expensive rent in SE. Thankfully a major surgery helped enormously and I am now a higher rate tax payer and just buying my first house at 50 (relocating now DC grown). Some people with the luxury of a double income or good paying job (which i’m thankful to have) have no idea how hard it is. Why are you all so bitter a struggling single mum who is doing an essential job has had a small windfall. Would you want to spend it all on rent?

OP - just do some research but you should be able to pay off car loan, and carpet and decorate your house without it being a deprivation of assets. Keep back the maximum you can have in savings so you can consider whether buying your council home in the future. Maybe once your DD has grown and your right to top up benefits reduces it would be preferable to own - you need to think about the future too as she won’t be a child forever.

I was in a similar situation earlier this year. The amount I received stopped my UC altogether so my income dropped and I now have to pay for things like the dentist. You UC will reduce but you will still get something which means you can still get free dental care etc.

I am keeping detailed records of my spending. I put a certain amount in an ISA but I also put some in to my pension, you are allowed to put up to £2880 a year in to a pension and the government put £720 on top of that. You could also start a pension for your daughter, I know there are children's plans available but I don't know much about them.

Obviously you cannot access that for a few years.

I think buying a house is a red herring, you're in stable accommodation and your repairs will be taken care of. Houses can be expensive to maintain and IMHO if you are on a low income a council house is worth more. I know you will never own it and will always pay rent that is the downside the upside, your rent will not skyrocket, you have a tenancy for life and might be able to pass that on to your daughter.

You can pay any debts off with your inheritance eg car and buy things you need for your house within reason. Or you can put a deposit down on a house yes you lose the rent element but you have a higher work allowance.
I would think carefully if you are unlikely to receive any future inheritance - when your child is an adult you likely won't get uc or if you do it will be a tiny amount and you will have to work more to pay ever increasing rents. 35 year mortgages would probably be just over £500 a month and theres probably schemes to boost your deposit if you are a first time buyer. A house to leave your child in future could be alot more than 2k in an isa

Jez some of the responses you’ve had are horrendous. Good to know you can retain £6k and keep your benefits. So I’d try to keep some as a nest egg ( don’t put in DD name, you might need this money) put rest paying off car and making house nice and think if it as part of a long term plan that eventually you will be able to buy that home when you’re in a better financial position. That sounds like you’d be doing exactly what your nan wanted. But if you need a holiday or other things do that. It’s not a out of money in grand scheme of things so yes it wisely 💐

OP, if your nan passed away within the past 2 years, you could ask the executor if you can do a deed of variation instead of accepting the cheque.

You can gift £6k to be given to your child, the remaining £6k to you, less the cost of getting the deed drawn up.
It might cost you a few hundred pounds, but realistically £12k isn't going to get you much more than trouble with UC and stress, well meaning as your nan was.

This has to be done within 2 years though, so not sure if it's a bit too late.
Really would have been better if you had been informed earlier, and this could have already been done, well within the time limit.

That’s not the point of benefits, op is working and the benefits are to help out her employers low wages.

the employee in UC is allowed £16,000 in savings whilst working and claiming benefits/top up wages

so all above board

You can spend it.

what you can’t do is depreciation of assests.

You could see wha your drop in UC is and set up a standing order of the difference to your account each month.

If it’s £120 that £1300 (ish) a year.

Thats 10 years of the money lasting.

But over that time you could also use a few grand for a car.

Your DD is 6. So I’d work out a long term plan for the money to last 5 years whilst you sort your house, spend some of the money on training etc because when your DD is 11 and in secondary school you’ll be able to get a better job, longer hours etc and be more financially secure.

Look at the money as a gateway to a better future (rather than a house deposit a future where you can earn more and start saving debit).

But you have a secure home and many people don’t ever own.

What would be a better goal is a career.!

God the cunts came out for this one didnt they?

DO NOT give up your council house @Stressedmum6761
Personally, I would be asking someone you trust to keep the money. I would treat you and your daughter to a lovely holiday, make your house a home and then save the rest.
Keep working hard, do all the training you can, work your way up and create a wonderful life for you and your daughter.

Some of you need to put down your phones and look around you. The loneliness screams out of every bitter post you write.

"Personally, I would be asking someone you trust to keep the money"

This is poor advice, surely. Are you advocating hiding the money to defraud the taxpayer?

6k is not much in the grand scheme of things. OP could pay off her car loan, buy furniture for kids bedrooms and a nice holiday for next summer.

Your man makes sense so far. Do fence 6k for savings - cash isa at best rate available.

Pay off debt and car finance.

Do you contribute to a pension? Can you increase your contribution? That would be another way of planing for the long term. You could put extra in a SIPP.

Buy any white goods and items for the house like beds or washing machines.

Pay for a holiday for next year

Is there any training you need or could access. Could you do a degree if you don’t have one, could you become teacher or a hlta or similar? Thinking about how to future proof your salary so you can buy your council house with its reduction would be great long term target.

what a lovely nan you had:)

What a weird thought process.

How are half of Londons key workers/ low paid workers surviving then? They live in social housing and claim UC top ups surely? It’s a government failing. They don’t pay certain sectors of staff a fair wage. Unison are CONSTANTLY balloting and fighting for TAS to be paid a decent wage. Many schools now want qualified teachers to TA now, particularly as TAS are expected to do class cover and thus have a decent set of basic academic qualifications, be first aid trained and undertaken CPD regularly.

I’ve just been medically retired from a TA role in a SEN school. I tell you now, those teachers cannot and would not, be able to teach to any standard, without the input of support staff in their classroom. Residentials wouldn’t take place, MacMillan coffees mornings, proms, discos, end of year assemblies, outdoor education, school trips; NONE of those activities would take place in my previous place of work, without support staff, NONE!! EVERY teacher was allocated a TA, including any designated 1:1 staff.

OP, you do a grand job. £12K isn’t a huge sum, but enough to make significant positive lifestyle changes. Check with your UC advisor on the
dos and don’ts. Even if you have to declare and take a monthly reduction, you will still have plenty. Or seek advice from CAB? Good luck 🤞

You really don't know?

I’d stop replying OP, this woman is incredibly bitter and rude. At no point have you suggested trying to hide your inheritance or even sought advice on ways to spend it without it being considered deprivation of capital, you were simply seeking advice about the options available to you.

Personally I’d do as others have suggested and use some of the money to do essential repairs/purchase essential items in your current home, but accept that if you are left with more than 6K after essential expenditure, it will mean a reduction in UC income. I’d save whatever is left and consider exercising the right to buy once you’re eligible to and if you’re in a position to afford a mortgage.

There’s a reason you’re allowed to have £6k without it affecting your benefits and it’s designed so that you can still have an emergency fund for things like unexpected household bills, car repairs, replacing white goods etc.

Please know not all of us hold such disparaging views of benefit claimants. I speak as a higher rate tax payer who has no issue with my tax contributing to helping people who need it. Most of us are only one change of circumstances away from having to claim benefits ourselves. Some people need to redirect their anger at a system that allows people to be working full time and still need to access benefits, rather than bullying other hard working mums, who are simply trying to get by.

It is obvious you need a second job in the school holidays, this would solve your problems over night and would mean you could buy your own house and live more comfortably. Given you work in the school sector, you could run holiday only childcare for local parents, and that would fit in well with your child and give her other children to play with. You could get a second job working from home 2/3 evenings a week.

If you are not going to upgrade your career (you could use the money for some professional qualifications) then you definitely need to consider how you can you use your time to make money. A job covering just school hours only should allow you plenty of time to secure a second income.

I would imagine your nanny knows exactly how tough old age is, and living at rock bottom in poverty on benefits into old age is not going to be fun at all, and is a very poor outcome. If we even have a welfare state in ten years time is debatable. You need to move heaven. and earth to get yourself out of this situation op, use that money to do so. Look to lift yourself and your child out of this scenario.

I would

1. clear debt
2. make your home comfortable, with good quality white goods etc that will hopefully last for years. Maybe get one or two extra special things you will use and enjoy all the time that will remind you of your nanny
3. set aside the equivalent of 3-6 months outgoings just in case
4. buy life insurance for you if you do not have it already, to give your daughter some security
5. invest in your own future with any training that might be useful, with a view to being in a strong position to up your hours once your daughter is more independent
6. pension for you. It is more important to make provision for your own future than your daughter at this point. Do you have a pension through work? Most schemes will allow for additional one-off payments

I agree with the previous poster about the obsession around home ownership. I grew up around the same message, OP, and honestly it’s not for everyone, so don’t feel like it’s the only way to do things.

I’ve just bought my first house at the age of 42 with a 5% deposit of less than £10K (I’m in Scotland), but for years I really didn’t know if home ownership was for me, so I took my time with it.

I don’t have any strategies or advice for how to handle the money situation, but I agree that you shouldn’t give up your secure tenancy.

If you like the house and the area, focus on making it a home for you and your daughter and then in a few years you can look at your options - you genuinely never know what’s around the corner, so don’t stress about getting on the property ladder right away or feel like it’s something you have to do because that’s what other people think success looks like.

I’m not sure what age you are, but there’s always time and you don’t need to rush. Just enjoy your new home.

I hope you get the inheritance thing sorted and don’t pay attention to those giving you a hard time 💕

Was the cheque written 2 years ago?

This is great advice.

If this was me I’d put 6k away, then pay off your car or and upgrade it, so it will last you. Book a holiday for next year with your dd, get your current home sorted and overpay on bills, like gas and elec , water etc pay your car insurance in full , whatever else you can, so that once the 6k is used when your back on full uc your bills are lower , house is done car sorted, bills in credit then you can have an easier year not worrying about money.

Hi , sorry about the loss of your Nan . I think you are too emotional today to make any decisions. The money she has left you is a huge amount but not enough for to buy a house, you may be feeling guilty you can’t use the money for how you believe your nan wanted you to and you need to make piece with that .
You need to accept you will need to take the hit on UC while your inheritance supports you . As others have said pay off any loans you have , furnish and decorate your home with some of it . Make your and your DD life comfortable I’m sure your nan would be happy that you and your DD have a secure , safe , comfortable home and life .
Once you know how much money you have left look at putting it into a high interest account, explore your pension contributions and options.

Put it in a savings account for your kid. Then she’ll have money for a new car, deposit etc, you’ll gain interest and it’s disregarded by UC

Because you have £12000 ????
UC is for people who need genuine help. You need to pay for yourself while you can and not rely on others (tax payers). Worry about buying a house when you can afford it, when your daughter is older and you can get a higher paying job.

She is wanting to cash the 12k whilst claiming UC with no deductions. She's asking mumsnetters for ways she can stash the £12k without declaring it basically

A monthly mortgage repayment will likely be cheaper than your rent repayment, yes things go wrong with houses, but not all the time, they tend to be a one of payment here and there

Look at part buy, part rent I think there’s some leeway of what you can pay that only affects your benefits for a certain threshold, and absolutely agree, it’s £12k but it’s a drop in the ocean, I would barely cover anything for long