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 over the threshold, then means tested benefits will reduce/end. No matter what you want it for.

Realistic for a family on a single low income? Of course they shouldn’t be. Why should they be? The minimum income role isn’t designed provide an income for an entire family. Thats the whole point. They need to be entry level and / or unskilled.

When was the last time you applied for a job?
Many roles ask for n years experience, certain qualifications and skills ie NOT entry level and/or unskilled and then pay barely more than minimum wage.

Very skilled people are having to take minimum wage jobs.

Xenobitch was correct. They said cut off is £16k and like me has repeatedly previously explained the tariff reduction rules, way before you jumped in.

Exactly this. The amount of jobs I've applied for I haven't heard back from because I haven't got xyz experience/qualifications is ridiculous and these were for low paid jobs. This person you're responding to hasn't got a clue what they're waffling about.

Not since 2008. Have been approached for each of my subsequent roles since then.

I do however hire about 30 people each year and would hire more if I could find more. There’s literally not enough good applicants on the market. Even “clean sheet” (ie zero experience) grads are hard to come by.

There is nothing unfortunate about that

Nope. If OP reduces the amount with some spending on her new home she won’t be penalised because things like essential furniture etc won’t count as deprivation of assets. She can also pay off her car loan, credit card and overdraft because it’s reducing legally enforceable debt and is explicitly permitted within UC rules. She is allowed to£6k without affecting benefit and her debts add up to another £2.5k. She can get advice as to what she can spend on her new home in the way of essentials, so she won’t be very much over the threshold by the time she’s finished paying things off.

How much is in your right to save ISA?

It doesn’t. Reducing or clearing legally enforcable debt is specifically allowable under UC rules.

I ask because I get the impression OP thinks her claim will continue however I am thinking it might close for a bit if you have been putting £200 a month for several years plus the £12k.

In the event she secured a mortgage she would likely qualify for support with mortgage interest (SMI). It’s a loan from DWP which would pay the interest on the mortgage until such time as OP was in a better position. It may not be suitable but it’s an option if she wanted to go down that road.

She already said it’s not £1500 yet.

Everyone needs a savings cushion, including benefit claimants. That’s why UC has thresholds over which benefit reduces and then stops. If this wasn’t allowed benefit claimants would continually be on the bones of their arse with no safety contingency and dependent on the state and tax payer for every life event. £6000 is sod all. The thresholds haven’t been reviewed for over 20 years and studies show that a realistic cushion would be more like a £12k minimum threshold. Not to mention that with no savings threshold those who are working would have their benefit stopped every time they received their wages.

Benefits are not necessarily short term - UC certainly isn’t for those working and on a low wage. And who said anything about windfalls being spent on car upgrades ? OP is talking about paying off an existing car loan, small overdraft and modest credit card debt - all of which is enforceable debt and allowable under UC. If she needs things for the house UC advisers will tell her what essentials she can spend it on without it being seen as deprivation of assets.

Keeping benefit claimants without their own savings doesn’t work. It makes them more reliant on the state and the small amounts allowable can help people lift themselves out of the need to claim those benefits.

That’s why we need to tax WEALTH properly now.

Absolutely this.

For those who are on PAYE yes - wages are calculated via HMRC. For those whose are self employed, on fixed term contracts with fluctuating hours and other variables, it’s calculated via the UC journal at the end of the assessment period. My main experience with UC was with disabled people, many of whom worked fluctuating hours due to disability, and some were self employed. Pretty much all of them had to declare their earnings every month so that the amount of top up could be calculated.

Again, there’s that undertone of “people just aren’t trying hard enough.”
As a business woman you are surely aware of positions receiving hundreds of applications.
What’s the problem in your sector? Not enough applicants or applicants w/o the necessary skills?

OP is in council housing. They are not going to increase her rent because she’s decorated the house. And even if that happened, apart from applicable exceptions like under occupation penalties, non dependent deductions and the benefit cap UC will usually cover the full eligible rent for council tenants, so it wouldn’t make any difference.

It’s like banging your head against the wall. The number of posters who seem to think that you shouldn’t have anything in the bank if you’re claiming benefits is shocking. It would be totally impractical and would cost the tax payer a lot more.

So to me it seems like yes you've struggled previously in life...but now you're in a privileged position you now look down your nose at people? You need to remember where you came from and things are a hell of a lot harder than things were in 2008 😂

They just don't want people to better themselves at all so they can keep sat on their high horses.

I'm astounded people are saying £12k isn't a lot of money!!!

I work, pay bills, taxes, not been on holiday for years, never had a decent car. Can't afford to get my hair done or other such luxuries. Don't get any benefits.

How can you say you are stretched every month when you're putting £200 a month away in an ISA, while on Universal Credit?

Apologies if I'm mistaken.

IKR. I remember a similar thread where a few posters said that even if you have £1 in the bank, you should not be able to claim benefits as they are for people who "have nothing at all".
Which makes no sense. All claims would stop as soon as the benefits hit their bank accounts.
People on here have some weird ideas and assumptions about benefits.

Will you be eligible for UC. If so you could investigate support for mortgage interest. I’ve posted the eligibility upthread.

So what’s your solution ? Maybe we should start by introducing a living wage so that benefit claimants can actually make ends meet instead of the tax payer effectively footing employers’ wage bills. Maybe we should introduce a sensible cap on the rents landlords demand simply because they can - and stop the reprehensible practice of them increasing rents every year in line with UC housing element increases. From there we can look at the super rich and fat cat corporations who have accountants well versed in tax avoidance. We’re a first world economy and in a fairer system there many ways we can save money without punishing the vulnerable every single time.