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.

I never said you "ARE" committing fraud. You need to declare it, then you will have no concerns. What is wrong with you?

No WAY should the OP give up her council house to purchase a property. £12K is naff all towards a house. She will very likely have a minimum of £100K mortgage if not much more.

She will get NO help with the mortgage repayments (if she finds she cannot afford them which is likely,) and they may be much more than her rent, and they could go up and up even more... And she will be responsible for repairs and maintenance too, including big things like new heating system, new electrics, and new roof etc, and leaks, and all sorts of issues that crop up in properties...

You'd have to have rocks in your head to give up a council tenancy being in the situation that the OP is in.

.

What's wrong is that OP has been repeatedly attacked and accused of being a beggar/sponger/fraudster on this thread so she's probably fed up with any comment that alludes to that no matter how it was intended.

Premium bonds are not a good investment generally.

Martin Lewis has useful info on children's savings https://www.moneysavingexpert.com/savings/child-savings-tax-free/

Note this
If money is given by a parent or step-parent (not grandparents or others) and the interest earned on it is over £100/year from non-ISA savings, the whole thing is taxed like it's the parent's cash.
The £100 allowance is on a 'per parent' basis, rather than a 'per child' basis. The aim is to stop parents using their kids' tax-free allowance for an extra allowance.

But the interest rates can skyrocket.

@ILoveAGingerCatcan I ask why? Even with a £100k mortgage, this is an asset that she has for the future. UC will go right down when her child is older. This gives her a chance to set herself up. And also some security and something to pass onto her daughter also.

If extra money is needed, OP could maybe do some
holiday childcare or babysitting, or some kind of tutoring. I just think it’s worth exploring if it’s possible for her to buy

Very well said. Saved me typing out a response to that poster 😆

The term has the effect of implying that people on lower wages in education, nursing, elderly care, waste management and any number of other roles aren't 'net contributors'. Which would be incorrect, as what we get out is worth far more than what we put in, both in economic terms (in their enabling the function of our economy and society) and in terms of both maintaining decent living conditions and enabling future prosperity.

Absolutely this.

Because life is so unpredictable and your financial predicament can be VERY unpredictable. OP is a single mum on a low income. She has a lifetime, affordable-rent, tenancy on a council house, with all repairs and maintenance covered...This is like gold dust. Also, if she loses her income/loses her job, she will get her rent paid via housing benefit.

Anyone telling her to give up her lifetime, secure, affordable tenancy to take on a big mortgage, on a property that could give her loads of hidden costs via maintenance and repairs and extra insurances (that she will get NO help with if she loses her job) is giving her TERRIBLE advice. No financial help funding repairs. No help with mortgage payments. She loses her home.

She can barely scrape by now. Why are some people trying to throw her into the mire by saying 'put the £12K down as a deposit on a mortgaged house, to 'free up' the council house for someone more deserving..?!' SHE is deserving of it, and she needs to keep it! £12K is honestly fuck-all in the grand scheme of things!

.

Agree.
I am possibly facing unemployment with a mortgage in the near future.
UC will not cover my mortgage and bills and living. Not a hope. I can kick the can down the road a bit with mortgage “holiday”, UC mortgage help thingy. The kicked can just adds more interest to my mortgage.
My home is my asset and would need to be sold. If I was already renting I’d be mad to give it up.

It doesn't "work that way". UC is reduced when capital exceeds £6k and stops altogether when it reaches £16k.

Proms, discos and coffee mornings are not required for good education. It’s nice to have social activity and I’m sure proms and discos can be handled by the PTA. That’s certainly not an argument to have TAs in every classroom. Plenty of countries with excellent education do not have 1-1 TAs and it’s very blinkered way to think that British inefficient way of organising school support is the only way so everyone working in a school is sacred

As to the other workers, as I said - the less tax receipts are there because lots of people are going low paid low qualified part time jobs for easier life (because they can, with UC top up), the less money there will be for wage increases in public sector. It’s always someone else who should work “to an early grave” but sure the OP should take holiday of a lifetime instead 🤦‍♀️

But if she could buy her current house on a discount in coming years? I don’t know OPs figures, but TA’s can earn between £17k and £34k depending on their training and experience. I’m not sure where OP sits income wise. If it’s a possibility and her job is relatively stable, it’s something to explore surely?

Don't underestimate the expense of owning a home - it is a lot of money constantly. There is the mortgage cost, generally always something that needs fixing, buildings insurance each year, mortgage cost hikes. You don't just put down a deposit and the rest is easy.

I agree with other posters you should use the money to improve your current circumstances and save as much as you can without impacting your UC.

The disparity of able and not able kids in state school classrooms is vast. These classroom cannot be managed by one single teacher. Education systems on continent are also crumbling. Most classroom in UK have up to 40% SEN. Apart from SEN the disruption and inability to focus on school work by so many non SEN kids is a huge challenge as poor young brains have been fried with tablets and mobile phone pacifiers since babyhood.

As said before OP would do well increase her salary by training to be a teacher. She has the best possible starting point for that.

When my son starts school, a TA will be keeping him alive by managing his medical condition. How can you say that isn't valuable?!

The whole job of a TA is to take the pressure off a teacher by managing SEN, medical needs, breaktimes, etc so that the teacher can concentrate on actually teaching.

Teachers and TA's don't get paid enough for what they do but it is invaluable work. It is very poor that anyone working full time would need any kind of benefits to be able to afford to live a basic standard of living, but that is where we are now. OP is clearly not living a life of luxury!

Well said.
These are the same people who advise high earners to put as much money as they can into their pension funds to avoid paying more tax or losing child benefit or whatever. They would be horrified if THEY were accused of doing something immoral.

That's especially the case in areas where housing is expensive. Average rent for a 2- or 3-bed property where I live is £1,800 a month, which is almost a month's net pay for someone on the average salary for the area.

Someone I know is a nursing sister, and a single parent of 3. She's on a decent salary and is still entitled to UC, simply because her rent is so high. If she was in social housing, she wouldn't be eligible for any help, because her rent would be so much lower.

If we didn’t have “net contributors” i.e. people who actually pay in more than they take out, where would the money for the welfare system, including the Pension, come from?

Yes also, a single person is allowed £6000 before it affects benefits, but a couple (or a family of four+) is not allowed any more than the £6000, despite having more potential outgoings.

Where would the net contributors be without the carers looking after their aged parents s, the refuge taking away their rubbish, the nurses at the hospital etc

society needs everyone and everyone contributing in different ways

Am always glad to see you LakieLady! Saves me banging my head against the wall of rules alone...!

So they would stop your rent portion of the uc but will increase your work allowance. Also if you declare it you can get a year leeway to find and buy a house.

Run the uc calculators and see what youd actully be getting do it as if you've already bought the house.

Capital and savings are combined for a joint/family claim. The rules are the same in relation to the combined total amount.

Hi OP, haven’t RTFT so sorry if this has been covered. If I was in this situation I’d repay any/all debt and put away an emergency fund in an easily accessible savings account with a decent interest rate. Anything remaining I’d either do an AVC into your current works pension if you have one, or look into a SIPP. Having money left untouched in a pension pot does not affect means-tested benefits if you are under State Pension age.

The issue with UC is that unfortunately it now has become something that disincentivises people to increase their qualifications and earn more. Plus there is often at attitude “why should I work more and try to earn more when I can spend time at home with children and get by with a UC top up”. And usual British attitude (different from quite a few other countries) that striving for more is somehow unbecoming.

Benefits have changed from safety net to an income top up and it’s a vicious circle- as it’s increasingly unaffordable and then it means it is unaffordable to raise public sector salaries because there is just less money coming in. You know that not only public sector people have UC top up right?plenty of people work part time in private sector and get it too.

so I personally would prefer that public sector workers were properly paid (my view of usefulness of TAs in every classroom aside) so they wouldn’t need a top up, and that private sector part timers weren’t entitled to it, unless they really needed it as a real safety net.