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.

If you’re trying to raise a child alone then you want a safety net. I too wouldn’t want to be throwing away a social housing home and regular UC money. Particularly in a time where education budgets are being slashed and the job market is difficult. If it was hundreds of thousands of pounds that would be different. But it’s 12k. That’s what some MNers spend on a holiday!

Good thinking asking for advice with regard to your recent inheritance. As you already have a council house and have spent money decorating and furnishing it, no way would I move because in the long term all building repairs etc will be paid for, plus no one will be able to take it off you. I very much doubt you would be eligible for a mortgage anyway on a low income from a school, whilst on universal credit and supporting your child. Plus you would need an excellent credit history, and proof of savings and future income. Suggest you put £6000 into an easy access savings account with your bank, and keep the rest in your current account for everyday expenses, and a holiday. Doubt your UC and rent payments will be affected drastically, just enjoy the luxury of having extra money to spend on yourself and child. Your Nanna will have been happy for you.

I completely agree, we all need each other but you didn’t answer my question. If we had zero net contributors, where would the money come from to pay the essential carers and bin men and nurses and teachers?

This. Based on OP’s salary, she will be allowed £1000 in savings interest. She’d need roughly £20,000 in 5% savings accounts to surpass this (which she doesn’t).

Premium bonds are for people who have surpassed their tax free interest allowance. This is not OP.

Really, you try to help people to hide any money they may recieve, known as deprivation of capital. If the op deliberately gets rid of £6,000, specifically to reduce savings and keep the amount of benefits she already has, the DWP, treats it as notional capital. This means they will still treat ,the op as thought you still had £12,000. They then could reduce or stop benefits and then investigate the op. Be honest

Personally I'd look into whether I could get a mortgage or not on money you earn, any child benefit and maintenance. It's what your Nan wanted for you so I'd look into that first with mortgage advisor. Try Town and Country because they are free and will check it all out for you. Do you have any other savings you could use for solicitors costs if you did buy a house? It would give you and your DD security if you could do it.

As a pp has stated if you didn't claim rent allowance you'd get UC paid at a higher rate.

Could you look for either a job with more hours or take on an additional job in school holidays. Holiday clubs are always looking for people to help run them.

Take your time. If you have never had this much money before don't get carried away and rush to spend it too quickly.

As a cheque you'd need to cash within 3 months. Once you cash you will get less UC on a sliding scale so still some help as under £16k.

You might find a holiday or a little runaround car would be beneficial for you and DD.

Have you spoken to your Mum because if you've inherited the chances are she has too and she might offer to give you a bit of her inheritance if she's ok ATM.

Agreed.

Many posters have been rather flippant about 12k being nothing, petty cash etc, I suppose they must be loaded.

I have never in my life been given 12k as a lump sum so to me that's a lot of money and I wouldn't buy a kitchen with that as some have suggested 😂My kitchen is from Ikea and was around 5k bought on interest free loan and self installed.

The key thing here is not really the money but how frustrated OP feels about not being able to freely decide over her inheritance from her lovely Nanny. If she wasn't on UC, she could be independent of all that. As she already is a TA and her kid is 6 years old so in school, she can train as a teacher and have a better salary with good career prospects. It's always best to earn your own money if you are able to, otherwise you are beholden to rules and shackles you may not like.

Point taken - sloppy wording on my behalf and I understand that people contribute in different ways that are important to society.

I still stand behind my opinion that it is unfair that someone can choose a less than full time work pattern, be topped up by the state but still expect to be able to keep any other cash they receive (disability and genuine caring responsibilities notwithstanding)

I literally said in my post that it doesn't work that way. Then you quoted me to say it doesn't work that way. Which is what I said. But ok.

Yes - but OP is trying to get around the current regulations isn't she.

I dont think you can reject an inheritance but you can do a "deed of variation" within 2 years of the death. I think this too would be seen as deprivation of capital though

So sorry you've got upset by some horrible people on here op. Unfortunately many people lash out as soon as benefits and inheritance are used in the same sentence and don't actually read any of the posts properly.

You will still get uc as long as your savings are below 16k. You will get a reduced amount but it's not a horrific reduction.

Just be transparent with dwp all the way and it will be fine. I would personally stay in your council house but your choice.

I think it's wise to pay off debts and then see what your situation is.

I feel for you as sadly once you're claiming any sort of benefit your money is no longer your own and inheritance can cause a lot of problems if it isn't isn't life changing amount.

All the best op.

But still needs tax payers money. Now,until her inheritance runs out, she doesn't need it. When it runs out, she can doubtless get more State support.

Same here. I live in a middle class village, but my closest town that's 5 miles away, is firmly working class, (with many minimum pay workers.) Yet even just last week, someone advertised a new build for rent - semi detached 3 bed house that you could swing a cat around in... 2 bedrooms were 7 X 9 feet and 7 X 10 feet in size, there was hardly any storage, and one parking space for a front garden. Back garden was about 20 feet wide and 16 feet long.

They wanted £1550 a month rent for it.

Many people who work in shops and stores, and on market stalls, and as carers, and at schools and for the NHS, barely make this money per month! How the F is anyone meant to afford that?! This is in a working class market town, not London or Brighton or Oxford or Cambridge! Or in the city centre in Liverpool or Manchester or Shrewsbury! It's a small-ish, working class market town!!!

There were 100s of posts on the Facebook page it was advertised on expressing disgust at the rent. NO-ONE expressed any interest in it! One person said 'yeah I know what will happen, no-one will take this up and it will be let out via the council, and half a dozen asylum seekers will be kept there at the taxpayers expense, and they'll make the excuse that they had to do that because no-one was coming forward to rent it!!!'

I am willing to bet that the benefit bashers attacking a single mum who works but earns minimum pay, and has to claim universal credit to top it up (and pretty much attacking anyone on benefits) would not give a SHIT if half a dozen asylum seekers were housed in this house 'at the taxpayers expense.'

OP, I would try to ignore those grandstanding with their righteous ideas of how you need to immediately stop claiming benefits. They obviously have no idea of what it is like to live hand to mouth for a long period of time.

Your aunt may well have had great intentions of you buying a property with the inheritance, but as you know you aren't currently in a position to do this. And the UC system isn't set up for those wanting to save their way out of it. You are in secure housing, you need to maximise that and possibly right to buy later, but no rush.

As others have said, I would recommend ensuring you leave around £5.5k in savings or cash ISA as an emergency fund and, or potentially towards house deposit in the future, ensuring you take out the interest so it doesn't sneak over £6k. I wouldn't do an investment for your daughter yet, from what I understand anything in her name can be counted towards your savings total. So you are better off retaining access until you no longer need UC, in case of emergency. It doesn't stop you gifting in the future from your name, but you need to prioritise now.

Use £2.5k to pay off your debt, this leaves you with £4k. Use £1k ish for a holiday (even if for next summer you can pay up front in full to ensure it is out of your name), and £3k to ensure you have good quality, long lasting furniture, white goods, and even things like shoes and coats for you both. To avoid the 'buy cheap buy twice' trap. This can save you money in the long term and hopefully make you feel more comfortable. You are allowed to have a better bed, better nights sleep, and claim benefits.

Using the money to just cover lost benefits in the short term saves the tax payer very little money in the short term, and is likely to cost more in the long term if its not helping you get into a stronger and more secure position.

If there is any chance of you starting some training in order to get a better paid job for the long term, try that too. The money being spent wisely is still an investment for you both, in quality of life and future prospects. It gives you a long term, more solid plan, of getting you established to not rely on benefits for the rest of your life.

I still think even buying her current home with a discount is a bad idea. It's still going to be quite a large mortgage, and she will be responsible for all the repairs and maintenance, along with insurances, and the likelihood of mortgage payment price hikes. She will also not get a penny towards anything if she ends up on less income/out of work, and will very likely lose the house. Her 'right to buy' discount will be naff-all help then.

In the 1980s, many people who always rented - mostly via the council, (and so did the generations before them,) took the opportunity to buy their council house under the 'right to buy' scheme... Many 1000s of them didn't realise that they would no longer have the council doing their repairs and maintenance. Some of them kept ringing the council when they had a loose handle on a cupboard door, or a leaky tap, and they said 'not our problem now.'

And when the council came around fitting new windows (on council homes,) the ones who had bought their home got passed by of course. Cue dozens of phone calls a day from people wanting to know why the council weren't doing their windows. Genuinely 100% true. Many people were shocked that the council no longer wanted anything to do with them, and wouldn't do their repairs. (and maintain the property...)

Within about 7-10 years, some of the homes - particularly on the big council estates built in the 1950s and 1960s, were looking really shoddy. Fractured soffits, broken roof tiles, cracked brickwork, corroding window frames and doors, damp popping up, and faded paintwork and all sorts..... Some people had got so used to the council doing everything that they didn't know what to do or where to turn, And there was NO-ONE to help or advise them.

I know someone who lives in a nice rural semi detached housing association bungalow (been there 14 years,) who has recently been asked 'why don't you take the chance of a right to buy?' The bungalow (big garden/garage/carport/spacious rooms,) is worth £215K on the open market and they can have it for £130K. But their rent is £420 a month, all their repairs are done, and they don't need to worry about not being able to afford the rent, as it will be paid for them when/if there comes a time when they can't afford it. They are almost 60 too, and have no intention of taking on a £130K mortgage at that age!

Also, the housing association is just about to put FREE solar panels on the roof, put a new boiler in (the current one is 13 years old,) and put new windows in (current ones are 20 years old.) She and her DH would be bonkers to leave. That work alone is worth about 11 grand!

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Not from what I've read, no.

To whom are you addressing this comment?

Still doesn't work that way. OP is still entitled to UC no matter how you might feel about it.

Yes, it is a struggle for many. (Being a homeowner/mortgage owner.) I think many people won't/don't admit it either, (that they are struggling/barely making ends meet/in debt, sometimes severe debt,) because they feel ashamed of it, like they are a failure.

Obviously they are not a failure at all, as no-one has a crystal ball to predict the future, and didn't see the well-paid-job loss coming, the ill health or disability, or all the roof repairs the house would need 4-5 years after that costs 10 grand, and the 5 grands worth of repairs caused by damp, and the 15 grand needed for underpinning, as the foundations have started to slip. (Along with other day to day, and routine repairs, and unexpected repairs and costs...)

But yes, I do believe that many more people struggle when buying a property, (and forking out all the money that goes along with it) than people realise, because they don't hear people complaining. (Because people feel too embarrassed to admit that they wish they had not bought a house!)

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Not sure if you’ve said or not. If the money was left in a will to you then can you ask for some to be left to your DD (there’s a special name of what it is).
If the money was left to someone else and they’ve just honoured nans wishes to give it to you ask if they can write 2 cheques one to you for x amount and one to your dd for x amount.
that way you are not depriving the assets

If OP was to put sone money in a junior ISA in her child's name. UC don't touch it. As only the child has access to withdrawn funds once they turn 18.

That is a good idea then (as some have suggested) to get 6 and a half grand and put it in an ISA for the child, and keep the rest for things she needs, as UC isn't affected by under 6 grand.

You sound like a 5 year old. What exactly do you suggest OPs spends money on? There's been several suggestions and people seem unhappy about each of those ideas. What exactly do you suggest? (Thats what OP asked for in the 1st place stay on topic).

You have the understanding of a five year old . How difficult is it to understand that she uses the money for day to day living expenses until it runs out and then she can go back to her benefits. Why should the Government subsidise someone who doesn't need it, albeit for a short period of time, until her inheritance runs out.