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.

But would you get a mortgage of 90%? Don’t forget house buying costs could add at least £2k to the purchase price, more depending on which mortgage you can get.
£110K -10% = £99k + £2k selling fees = £101K
If you could even get a mortgage of £99K it would cost IRO £500 a month.

It seems like you’re not yet in a position to buy.

@BlackRowan I suspect you wouldn't be able to be a TA. What a snobby person you are.

I wouldn’t worry about buying right now, you’ve just moved into a property and are making it your own.
I would put it somewhere, high interest with the plan that when your DD moves out you buy your house then as your nan wished. Your expenses will be less because your child will be less dependent on you etc
For the moment bank it, accept your benefits amount will drop and look to the long term.
When your child is older you would no longer need to work term time only so would be able to do additional work/take in a lodger without worry about the impact on your daughter to make your own house more affordable.
Condolences on the loss of your Nan, she obviously cared about you very much.
I’m sure she wouldn’t want the money to cause you lots of stress or for you to rush out and buy a house with it right now.

@Stressedmum6761 have you looked on .gov or spoken to someone about this? I thought it only counts of deprivation of assets if say you spend it on a luxury holiday for example. And also I read that it’s only the amount over £6000 that is counted, as long as you don’t go over the upper limit.

Check on .gov, talk to Citizens’ Advice, follow the rules regarding how soon you declare it. Some pointers here, too:

https://ukbenefitscalculator.co.uk/guides/deprivation-of-capital

https://www.gov.uk/guidance/universal-credit-money-savings-and-investments#property

To me it’s a no brainer. Keep your council house and declare the money. Buying a house isn’t just the mortgage- it’s the repairs and insurance etc. I don’t think op can afford it even with the 12 k.
You are going to allowed to keep all of the money but just have a reduction in your benefits as whilst you have the money you don’t need the benefits as much. When the extra 6k is gone your UC will resume as it was.
Im probably going to get called all sorts of names but the UC has to come from somewhere. It isn’t fair for a family who are just over the threshold and get nothing, to be paying money to someone with thousands in the bank. It just isn’t.
To each according to his need and all that.

This would be foolhardy thing to do. For the obvious reason that it would still impact your UC as it has to go through your bank account but also the first rule of thumb when it comes to finances is to look after the immediate need. You’re not in a position to put this money away for the future - you need it now, both you and your DD.
Put it in a high interest saving account (moneysavingexpert will have many listed) and draw down on it as you need it - that way it will be gaining interest as well as being accessible.

You are allowed £6k in savings before your UC is reduced. My foster child (now my adult young person who is disabled) has just been put into this position due to receiving 14 months back payment for PIP. Social care had just stopped funding the leased transport they use to get to college so they used the excess to buy their own vehicle and insure it. Going forward it will save them £90 a month over paying for the lease vehicle. So you need to spend half your inheritance...

Benefits are for people who can't support themselves. Now you can and will need to until your inheritance has been used up and then it is work or back on benefits.

Or you could support yourself day to day without relying on taxpayers who might not have twelve grand.

No financial advice beyond what PP’s have offered but very sorry to hear about the loss of your nan. She clearly loved you very much 🥰💐

OP put it on a.pension pot. That way it doesn't impact your benefits but it won't be squandered.

@DewDropsAndCobWebs
also if you can arrange to get the money just after you have received your UC payment
because making a change in capital is a payment blocker and they will stop your payment till you have verified your capital

I would recommend that if you’re getting it 1st of September - get papers copied of your last 4 months bank staments ( of any bank accounts you have )
when update in your journal you might have to go into the job centre and do a capital verification appointment

so if you get the statements ready it will save you time

good luck and make sure you treat yourself to something nice as well

Agree with all this. You’ll need savings for car repairs / new appliances/ school supplies/ kids clothes.
take the small hit on the benefits and relax that you’ve cleared your car loan, have a buffer for emergencies and live in a secure home that you have some cash to make nice.
i wouldn’t view this money as a problem. Don’t put it in an ISA for your child, you may need it at some point.
you could also top up your work pension via salary sacrifice if that’s an option to reduce your gross income? Not sure if that works in school pensions but that’s what most high earners do to reduce tax liability.

Ignore them.

Give over🙄

Ignore all the ‘you should use it to live on’ comments.

This is a chance to get yourself into a position where you will no longer need benefits - so for example buying your own home so you no longer need social housing in the future.

You are allowed £6000 in savings anyway before UC is impacted. A LISA is a great way to build up enough to pay a deposit and if you never get there, it will help you in later life.

Go to citizens advice and ask them to help you to figure out what to do for the best. They offer advice on maximising your finances whilst on benefits and it’s completely confidential. They don’t report to anyone.

And don’t worry about the ethics of it all.

Having a trillion pounds yet paying your workers minimum wage and treating them like commodities is unethical. It’s the most wealthy, not benefits claimants, that are the biggest economic problem in this country. Anyone telling you to live on it and stop claiming has never been poor.

@ILoveAGingerCat absolutely she should keep her house. She was the one going on about buying something using the £12k as a deposit.

“benefits are supposed to be for those who are in genuine need”

This. If you’ve got £12k why do you expect the taxpayer to fund you?

Check all of this with citizens advice.

£12,000 is nothing. Not really.

You can have £6000 in savings and still claim full UC.

Because having some money out by for unexpected repairs is sensible.

the OP does work. And pays taxes. So what’s your point?

I don't know if this would be allowed but it seems your options are limited OP.

If it was me I think I would split the money between my kids and put it in a junior isa for them.

OP is in a job..... she works.

Part rent part buy is your best bet now. No point in saving if it goes over 16k UC stops. If you could buy a 10% share and UC will pay the rent element and you will have a minimal mortgage and the higher work allowance. Go for a new build and you haven’t got to worry about things going wrong as usually come with a guarantee- sometimes for 10 years.

The rent element of UC would stop and there’s no equivalent for help with mortgage payments, l think that’s the issue.