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.

So many people are working, yet still
struggle to make ends meet. It’s appalling.

It sounds like you can have 6000 in savings. So there’s 6000 left. I think it’s a great idea to put it in your daughters name in an isa to save for if she wants to study later on. Another thought I had was if you had a specific goal career wise, could you invest in a course so that you could more easily pursue it.

Are there people on here who seriously want OP to stick the money in the bank, which will reduce her benefits, and then use those savings to cover that shortfall until it's all gone, and then increase her benefits again? So her lovely nan leaves her 12k and it makes literally no difference to her life?! Give over.

How can the wealthy be the 'biggest economic problem' when the benefits bill has ballooned to such a size that it's now bigger than the income tax taken from all workers combined? Both ends are the problem, hence the comments.

Why are you angry at a stranger? The flaws in the system are not OPs fault.

Her poor nan has passed away. She has been left some money. OP is asking for ideas on what's best to do.... I don't see that as anything to get upset over.

Really 12k isn't as much as it sounds. MN maybe isn't the place for you if you are going to take OP to heart. Its not that deep at all!! We are talking about 12k not 100k Christ.

On UC and going on once in a lifetime holiday - stop it!

Yes sour grapes isn't it.

£6k in a cash ISA for you - won't affect your UC.
£6k into a junior ISA for your daughter invested in a global tracker. This could well grow to £13-14k by the time she is 18, which would be great if she wants to go to uni. Or leave it invested until she's 24 and then she could have around £20k- nice deposit on a small house which would also be in the spirit of the inheritance.

The benefits system is crackers and really discourages people from taking steps to get off them.

"Are there people on here who seriously want OP to stick the money in the bank, which will reduce her benefits, and then use those savings to cover that shortfall until it's all gone, and then increase her benefits again? So her lovely nan leaves her 12k and it makes literally no difference to her life?! Give over"

1 most people have said pay off debts buy furniture have a holiday etc.

1. It won't all be gone as the govt allows her to keep 6k before any benefit reduction.

1. Ultimately the op along will millions of others is dependent on benefits so her immediate priority when posting is to ensure she does not lose them. This is because she does not earn enough to support herself or her family. It seems like she will be reliant on the taxpayers for many years. Now we can views on that e.g it is wrong that taxpayer has to subsidise companies paying low wages or that being on benefits long term or permanently is unsustainable but being on benefits rightly has conditions and limits attached. People with savings are expected to use some of them to pay their way.

OP let.me repeat this hoping you see it as I've been in a similar boat (albeit with less money).

PUT IT IN A PENSION POT. It really is the best way.

Or she could get that £110,000 house and reduce the UC by the rent element - a saving to the taxpayer. Of which, by the way, OP is one.

She’s allowed £6000 in savings before it affects UC - contrary to popular belief it’s not financially savvy to disallow every penny in savings because it makes claimants reliant on the state for every adverse event in their lives. The UC savings thresholds haven’t been uprated or even reviewed for twenty years - they were carried over from legacy benefits and several studies have concluded that £12,000 should realistically be the lower threshold now as the monetary value has eroded over time.

I can understand the desire to do this on a human level but OP must declare the windfall and deal with the consequences.

As long as she is transparent, it will all be fine.

Universal Credit is a means tested benefit and OP could expect some deductions every month.

@Stressedmum6761 if you already have existing savings in your bank account, the 12k will be added to that total and if your combined savings go above 16k your Universal Credit claim will stop completely. Best to be aware.

You are very lucky, your nanny was so kind to leave you this money, and you should absolutely enjoy it!

Just make sure to be completely honest and transparent with the DWP. It's the fair and ethical thing to do, which I know matters to you OP.

Ethics? She's been left 12k not 120k.

Some people have to get on their high horse don't they?
Lol.
The OP is being perfectly pleasant, too.

If you read the earlier comment this poster made l think you’ll find it’s not OP they’re angry at.

What are you on about? She is receiving UC so will have to abide by the rules.
It's odd to me how 12k seems to be just petty cash to some on this thread. Many of us can only dream of such a windfall.

giving £6k away to a family member would be seen as deprivation of assets and she would lose the £6k part to her benefit regardless

as another poster states, stick some or all of the money in a pension pot and it will not be seen as deprivation of assets

keep all the receipts for money you do spend, a holiday or a second hand car etc You are allowed to spend buy the powers that be like to know and have receipts

The benefits system allows you to have £16,000 in savings whilst claiming money from the public purse. That imo isn't crackers, but a fair system. Anything over £6k the interest will be taken into account

I agree.

This is exactly the advice I have given to many clients in OP's position.

I think the capital limits are ridiculously low though. They haven't been increased for 20 years, and if they'd kept pace with inflation, they'd be nearly double the current amount.

I don't know if you are still on the thread OP, but this is my experience of receiving an inheritance and being on UC.

My husband inherited £40K at the end of February this year. I told UC the day it went in his account. I then had to go to the job centre to show evidence, i.e. bank statements. The UC account was closed that day (yours wouldn't be closed, as you are under the £16K threshold). I paid off £15K of debt, we used £20K to fund vital dental treatment for my husband and were back on UC by June. I had to go back to the job centre, again armed with bank statements. I was expecting to have to account for everything that had been spent but surprisingly I didn't. I verbally explained what the money had been spent on, the job centre advisor ticked some boxes on screen and we were back on full UC within a week.

Ovbiously this is just my experience but it wasn't as scary or difficult as I was expecting. I imagine it will be much simpler for you as your inheritance is less. If you just pay off your car debt and buy some essentials for your home such as decorating, appliances, etc. then you won't be losing much for very long at all. Good luck!

You can receive UC with savings up to £15,999. Hope that helps.

You can purchase a shared equity new build property, put your inheritance down as a deposit, mortgage your half, and then the council will pay the part you ‘rent’ from the builder.

I don’t agree with it personally, but my friend did this exact same thing. She came into £80k whilst claiming UC, put it all down on a house under a shared equity scheme, took her part of the mortgage whilst claiming UC and then the council pay the parts she rents. She effectively lives in a big new build property for £100 a month. I have another friend whose mum came into £300k, she bought a house outright and went straight back to claiming UC. Again, I don’t agree with it, as I think you should have to use that money to support yourself like everyone else would have too if you had more than £16k in the bank, but it’s our failing system that allows you to it.

I have not read the full thread but can a trusted family member like your mum keep the cash for you and just sent it in parts. Ie you use 2k for a new sofa, 2k for a holiday. £500 for a buffer on occasion.

It's like having your own savings but not in one hit. 12k really won't stretch that far to be fair but I can understand the excitement.

If you really want to use it to buy a house then keep the cheque back, go and see if you can get a mortgage first and then only cash it when it's time to pay a deposit.

Because the ‘wealthy’ are indirectly benefiting from that benefits bill. Wealthy employers are basically expecting the tax payer to contribute to their wage bill via UC top ups so they don’t have to pay their employees enough to actually live on. Landlords are charging exorbitant rents, and are increasing those rents every year in line with UC housing element increases. And yet it’s never these things that are led with when it’s time for benefit cuts. It’s always couched in terms of lazy scroungers sponging off the tax payer - and mostly aimed at the disabled.

It's not pretty cash at all but it's not a life changing amount for most either.

Most would just use it for a few holidays. New kitchen etc.
Or pay off some of the mortgage.

I'd have to advise informing the dwp as she might get caught out or finding a way of legitimately keeping it.

I'd have no problem at all morally with her not doing so, though. None at at all.

I bet that a good percentage of those getting on their high horse about ethics would probably think nothing of spending 12k on a kitchen that's less than a few years old.

What would you spend 12k on?

Come on, what are 12k going to do realistically? OP didn’t inherit a fortune.