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.

Not necessarily, I had a £3k deposit for a house with a similar price bracket as Op, and used price comparisons for the solicitors etc

OP has did the maths and she can’t afford it easily or at all - which is not surprising since she’s a single income household on a low wage at that. Some of her rent gets covered by UC, as many of us have said - it’s best she keeps this security of a council house partly paid for by UC at least until her kid is in high school

This sounds like a good plan. You don’t seem to be in a position to buy a home tbh, and the stability of a council property is a lot to give up.

Ask the solicitors dealing with the estate to vary the Will and put your share in a discretionary trust. Unethical yes but will get around your problem as you’re not immediately entitled to the money.

But anything over £6000 your UC is tapered down. You are strangely expected to support yourself. I’m not benefit bashing , I was on benefits myself at one point.

this might help https://www.ukbenefits.co.uk/how-to-avoid-inheritance-affecting-benefits-uk/

Where did you get the idea she’s wanting to stash it and not declare?

Other people have suggested that but has OP? I can’t remember every single one of her posts but I went back and read her Op and initially her question was if she should spend the whole lot on a deposit and holiday - which shes now realised as being totally unrealistic. And her worry was if she doesn’t and she leaves it in her bank how much she will get deducted.

That’s not the same as saying she is going to stash it without declaring it and it’s not what I got from her subsequent posts.

What I would do would be use it sensibly and immediately until it goes down to 6K (if that’s the threshold for not impacting your universal credit):

• Pay off any debts
• Buy things like washing machine / car etc whatever is useful and you’ve been waiting to replace
• Buy any clothing / shoes needed
• If your kids are older secondary school age then buy laptops for them to do their homework
• Take out cash or buy ahead if you already know what kids would like for Xmas and also buy yourself presents
• Put some money in kids savings
• Book a holiday

As you know, your housing is more secure than a mortgaged house or shared ownership. Tell your family that. Tell them if they’re writing wills to pass it straight to your children. And if you have a credit card you can buy stuff on that and then pay it off when you cash the cheque in a couple of months if you’re allowed to pay off debt (I think that might be clearer in the rules about deprivation of assets).

😂😂😂

Hi OP, I was in a similar situation a few years back and people can moan about it being unethical etc but actually unless you are savvy it’s really unfair to have to spend it all and not put it towards something that will better life. In my case it was quite a bit more than 12k I was due to be left but I was a single parent, who had fled dv living in a refuge. I wanted to retrain /go to uni but having the money in my bank would’ve meant I’d have to spend it all on uni fees / my benefits would stop and I’d never be able to put it towards a deposit etc. the money was in a trust and I was not a trustee so I asked for it not to be given to me until my life was in a better place. I ended up waiting about 15 years until I’d met my now partner and I was qualified and only then was it released to me so I could use it as a deposit for a house. Before anyone jumps down my neck it wasn’t illegal as we had solicitors in charge of it and it was never in my name. OP if you have a cheque in your name that might not be an option for you I’m afraid . I would be tempted to give it to your child in a savings account where it can gain some interest and perhaps be useful for their future x

This is absolutely fantastic. This is precisely what you should be doing.

First, pay off any debts.

Second, finish renovating your house; also think about buying a new cooker, fridge, washing machine, TV etc if yours are very old.

Third, consider spending some of the money on a reasonable holiday.

Fourth, Once your total amount is below £6,000 then put some of that money aside for your daughter but also keep some in a savings account for a rainy day just in case you need it in an emergency.

I haven’t read all responses so this might have been mentioned already, but Lloyds have a new mortgage scheme - 5k deposit for first time buyers on properties under 300k. Worth looking into?

OP please don't take benefits advice from people on the internet, I've seen some really concerning responses on here suggesting you ask a relative to look after it or put it in your daughter's name or spend it all on a car and holiday! Give your local Citizens Advice a call or email and get professional, accredited advice from an organisation who will ensure you are doing everything above board.

How would you pay the mortgage though, if UC covers your rent? If you buy a house you stop getting the rent element, its not available for mortgage payments

You might want to double check but I think putting some away for your child may count as 'deprivation of assets' for UC purposes

Aren't you allowed £16k in savings? I would stay in the council house, you will be hugely stretched with a mortgage if you can get one, keep the money for big expenses in the future and put it in a high rate savings account. It's really nice to have a bit of money saved I'm sure your Nanny would understand that buying a house isn't feasible at the minute.

what is wrong with you people, I’m on universal credit, I work and I private rent however this woman is still entitled and in need of a council property regardless of am inheritance she didn’t know was coming £12k. As soon as I seen the caption I thought oh gosh god help Op she’s fed herself to the wolves on this one. Everyone hates someone that needs support off benefits on mumsnet

Perhaps spend 6k of it on things you need , stuff for the house , a holiday, take some cash out for emergencies then you won’t need to declare it as you are allowed 6k in savings.
if buying a house will make things worse, stay where you are, you won’t have to struggle & this money will help you & your child a little bit.

OP has not once said anything about trying to hide money or not using the money to support herself. She was asking a perfectly valid question about a highly complicated system that even those who work in don’t seem to understand.

People need to stop having a go at her - this site, for all its wisdom and support really sickens me at times.

Do you drive? If you do buy a newer car, if you don't put it towards lessons and a car.

If the cheque is signed by your nanny, you can't cash it anyway as banks will not honour a cheque signed by someone who has passed away.
If the cheque has been issued by your mum or dad say, from her estate, it might be worth looking at whether the bequest was in her formal will. Because if not, maybe you could ask your mum or dad to keep it aside for you for when you do want to buy a house.
If you've been left the money in her will though you would be obliged to recieve it as far as your UC is concerned.

I agree she’ll struggle to pay mortgage repayments and would be setting herself up for a great deal of stress and insecurity.

However the thread has moved on since then . It looks like Op has very sensibly moved away from the idea of buying a house and is aware it would be too much of a financial strain on her.

Thank you for this, solid advice. I have a car which I need to finish paying off so I think I will be doing that first and foremost. The house also does needs a lotttt of renovation which I can also add to that. I've been decorating on a budget so far so maybe I can decorate a bit more lavishly!
The rest I may put into an ISA for DD for when she's old enough too.

This is a good plan @Stressedmum6761 except be mindful that if you put any in an ISA for your DD it should be after you have less than 6K. If you have say 8K left and put £2001 in your child’s ISA to take you below the threshold this may be seen as deprivation of assets!

But tbh it sounds as if the car repayments and renovating will take you below 6K anyway. And if not consider throwing in a sunny break to Greece or maybe a rainy break to Wales/Scotland 😆since you did mention wanting to use some on a holiday!

I think you’d be very lucky these days to have a class of children with only 2 needing extra support. I was the 3rd TA in one classroom at one bit. We honestly could have done with another 3 with all the SEND needs.

It sounds like you have good plans for your inheritance. ❤️

On the face of it you can’t afford to move out of council but you can use the money to improve your life. You can use the capital to pay off any debts without it affecting your entitlement as that is not seen as a depreciation of capital. I would pay it down to less than 6k the amount it starts affecting UC. If you are lucky enough to have debt less than the other 6k you could open a LISA for your child as the can’t access until 18 the savings wouldn’t be classed as yours. Also once you have reduced to less than 6k capital you can open a help to save account (unless you previously have had on on UC)

I would say you need to talk to your job coach before you take financial advice from an internet chat room.

In my limited experience of a similar situation putting some of the legacy in a pension fund will be useful depending on your circumstances. We were also advised to have a good holiday with our money. Your housing situation is confusing the situation, if you have a council house then stick with it as long as you possibly can. Good luck OP!