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.

You have to declare ALL savings, even a small amount on your UC journal. It doesn't affect your payments until it goes over 6k however. To those suggesting OP spends 6k and puts the rest away, and doesn't tell UC, please know that this is likely to disadvantage her in the future.

OP, please go and seek professional advice on this matter. If you spend the money, put it into a savings account in your daughter's name, or even a Lifetime ISA for yourself and the DWP decides you have deprived yourself of capital, they will treat you as if you still have the capital. So your UC payment will be reduced by the amount it would have been reduced by if you had kept it. You are treated as if you have the capital from the moment you gain it, so even if you haven't paid the cheque into the bank, you should tell them about it.

I'm not on benefits and I'm not suggesting you do any of the below, but if I were in your position, to keep within the rules and make sure I had maximum use of the money, I'd put 5k in a high interest savings account, spend a small amount on a second hand car if I needed one, and pay off any debts. I'd leave the rest in an instant access account and tell UC exactly how much I had in that account and the high interest account every month. They would adjust my UC payment accordingly and I would take the amount they have adjusted out of the instant access account every month, until my total level of savings reduced to under 6k, which would take a good few years. When the interest on the other account starts to take it up to £6k, I'd take a small amount out for a home improvement such as decorating a bedroom or for an essential repair on a car when it's needed.

The key thing here is to keep the DWP informed via your UC journal. The last thing you want is for them to find out at a later date and then you'll have to start sending months of bank statements etc to prove how long you've had the money and when you knew you were getting it. Please go and speak to Citizens Advice, they will give you good advice on what you can and can't do.

Your UC won't stop anyway but will just be reduced. Why are you worrying? You will be able to pay bills.

I believe there is going to be at least three children with autism who will need a one to one who start school including my son who probably won't get them. I suspect more as I don't know all the children starting. That poster will probably moan about my son being in her child's class!

I thought you are allowed savings up to £16k without benefits being effected?

Sorry just did the calculator, the first £6k is ignored so it’s just a reduction on the rest. Assuming you have no other savings it a deduction of = £104.40 reduction per month.

Can you delay putting the money in the bank for a bit, then when you do, report it, take the hit on the reduction until you decide what to do with the money. Invest the money, as you’re not in a position to buy right now. Maybe in a couple of years you can reassess. Good luck.

This is a really good idea. Your daughter won't be 6 years old forever, and your term-time job gives you the time to study.

Goven your age, investing in a good career that pays well will lead to more security and a home of your own. I would not waste it on a holiday that will soon be forgotten, but on a proper plan to lead to much more financial security, not just for you, but for your dd. Your situation is precarious, because your life depends on external state benefits which could change in the future.

I had to stop reading. @Stressedmum6761 wasnt being advised she was being battered and benefit bashed by bitter people with nothing better to do with their time. Under the guise of the mumsnet vipers i’m sure.

Im sure all those giving her a hard time ( over £12,000) for ASKING for advice have had perfect lives, never worked on a low wage (that is deemed so low that it’s topped up!) never ran into hard times or needed help and support.

@Stressedmum6761 i couldn’t read the full thread because of how bitchy people were being to you for no reason but i hope some of the responses were a little kinder and more helpful.

It used to be 16K the limit in savings before it affected benefits didn't it ? Not sure , haven't kept up latest legislation.

In your situation OP I wouldn't think of buying a house. You have a council house (lifetime tenancy?) with lower than market rent. You also have a very nice job, and at the same time your rent is fully covered. If you were able to get a mortgage, you'd need to go full time in order to keep on top of mortgage payments, for at least 25 years.
Declare the £12k, the deduction isn't huge anyway. Decorate your house, perhaps go on holiday and you can also open a SIPP. UC will deduct the amount paid in from your earnings, AND the government top it up by 25% per month. Eg if you earn £800 per month, but pay £100 into your SIPP, UC consider your income to be £700. I'd put £1k in as a first payment then start a DD of £100 per month.
I'd also open an ISA of some sort for your daughter, which is allowed on UC and is not considered savings if it is in your name.
£12k is not a life-changing amount of money, so don't make any rash decisions 💐

Fucking hell! I have seen some absolute arseholes on mm but this thread needs a prize! 12k is (and I'm not saying this because I'm a super rich mn arsehole, I'm not- just aware of the cost of living) not a huge sum at all. My mum left me 26k and that went on a cheap kitchen, cheap bathroom and a couple of holidays. (For those worried about 'tax payers money' btw we weren't and aren't on benefits so I dont explode with fury.)

Stay in your home and do what needs to be done to make it lovely, have a holiday (from your worthless apparently) job then put whether is left away.
The people on here raising their blood pressure about dreadful benefits types are total cunts with no idea of reality

Good morning @Stressedmum6761 .

I would speak to a financial advisor. Shared ownership is out there and will increase. We are already seeing massive price reductions on houses so putting some aside for the future would be my advice. I think there's a property ISA if you have never owned a house.
Definitely pay off your car as that will be at 7%+ APR.

If the previous poster is correct having £6k over the limit is £17 per thousand per month so £100 will be taken from you max. If you've paid down debt it will be less.
Nobody goes on benefits to stay there in my opinion. I suspect you are well educated as you write well and I admire your composure. Many of last nights posters were vile. They would have got the end of my tongue.
Can you at some point up your skills to PGCE level? Teachers are leaving the profession in droves. At least you know what a classroom is really like.
Fwiw I had a very big job and in my lifetime paid well over £1m in tax. I nearly died last year and got very little back. I don't begrudge you a penny.
You're hardly sitting at home vaping with six kids (I know someone who got pregnant after the two child cap was lifted).
Good luck to you.

Look it’s 12 grand which of course is a lovely amount of money to be gifted by an incredibly missed relative but it’s not a monumental amount that’s going to set you up for life!

You have a secure home which isn’t going anywhere - use the money to ensure you and your daughter remain comfortable such as, paying off any debts, housing repairs, buy a car, furniture etc and then what’s left take your daughter away!

Its not an amount that meets any thresholds for losing your entitled benefits but of course it may change them for a while which is a hit you should be able to take if the money is spent to make life more comfortable.

damned if you do damned if you don't in this world.
Not at all. Just play by the rules. Declare it and then deal with the consequences. You do realise that I and others work and pay for you through our taxes? I don't have 10k (or 1k) lying around and have to make hard choices to pay my own way. You can ease the load on the benefit system by paying your own way for a while with those 10K.

This isn’t very nice. Whilst I do not agree that what op does isn’t valuable or skilled, what would you do op, if no one did the “big scary” jobs? It’s very easy (and to be fair, relevant) to say we need people in care/ta roles etc but, we also need people to be accountants and solicitors and engineers. One, because we need the skills and two because yes, as net contributors, they make it possible to fund things. If we had no one in “big scary” jobs and no net contributors, how would the country function?

@Stressedmum6761
pop over to Reddit look for the DWP / benefit subs
you have DWP workers on there as MODS
they are really helpful & nice

and don’t stress - you can spend the money on debts even have a holiday replace furniture
just keep receipts for stuff

It might be worth looking at shared ownership properties, where you part own and part rent. You would have enough deposit and universal credit would still pay the housing element on the rent. You would have an asset to leave to your daughter eventually. Good luck and sorry for your loss too x

1 million% this!

You can get help with a mortgage if you claim UC, it's called Support for Mortgage Interest (SMI) and it's a loan that pays the mortgage interest for you, which you then have to pay back out of the proceeds when you sell the house.

I’m not sure why people are getting so enraged. I am not entitled to claim anything and see myself as lucky to be in that fortunate position. The issue is actually employers relying on the government to support and top up their low wages for their staff so they don’t have to.

Personally I would cash the cheque, report it to UC, pay the £104.40 deduction on your UC and use it to make your house nice. As the savings reduce so will your deductions. You need to keep receipts etc. in case they ask what you spent it on. Remember your work allowance goes up if you don’t claim rent on UC so you won’t lose all of your money as you’ll have less deductions for that.

@Stressedmum6761 you will lose about 120
a month
so even if you took 120 every month out of your inheritance to replace it you will be fine

a friend of mine was and still is on UC quite severely disabled and won’t ever be able to work again

sje was due to inherit her parents house in their will - on my advice, she asked them to change the will to leave to her daughter - her parents did this and her daughter was able to buy a house

if she had got the money it wouldn’t have made her any better off due to her disabilities

They will only pay that if the person can’t work

Not from my experience of working in a school for 10 years . TAs very hard working and valuable. The problem being , the rest of society ( the Gov) just find them an easy target to give them a low wage

OP works part time
I think that even if wages for this kind of role were increased, hours would be reduced

A one off payment of 12K isn't going to be the difference between affording a to own and house and not affording to own a house.