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.

We’re on UC and have a mortgage so don’t get the rent element of it so we’re down by about £5-600 a month maybe. It’s really tough as our mortgage will go up in January by at least £200 so that’s extra money we’ll have to find on an extremely tight budget

Please don't cry and get upset @Stressedmum6761 The fact is that some posters on here live privileged lives and live in a bubble, and have no idea what life is like for people who are not loaded, with lots of surplus income like them...., And as I said, some of them do not like people in social housing having a decent quality of life. Some of the social-housing-tenant bashing threads I have seen on here would make your eyes water.

Some posters get SO angry if someone in social housing does quite well for themselves, and their income increases by 30 or 40%, (say, from £25K/30K household income to about £40K!) They demand to know why they are not giving up their home to someone 'more deserving!' 🙄They cannot bear it that people in social housing are comfortable and can GASP afford a holiday every year and a car that is less than 10 years old!

Don't take it to heart. Some people need to walk in other peoples shoes to know how hard life really can be for many. ❤ You do what is best for YOU, and do not give up that social housing property. Not for 12 grand!

.

Most of the responses on this thread are just awful. I'm pretty sure that all those implying that it's immoral for OP to keep this gift from her grandmother and continue to claim UC have never been in OP's shoes. If they got an inheritance from a loved one, I bet they'd could just splash out or stick it in their savings with glee, and never give a thought to having to part with any of it .

This money is absolutely huge to OP. Life is tough for her and I hope she can enjoy it without worrying about her benefits.

Yeah you just get less UC until it's gone down. And you get the full amount again once you've under 6k.
Idk where you live but surely 6k will be gone in about 3 months anyway, just using it on day to day stuff? In the absence of your UC.

12k is a really lovely gift from your nanny, but it's not a lot off money. You won't be able to put down a deposit and afford the mortgage payments. I think you'd be better off making your council house nice. Once you've been their for 3 years you'll have the opportunity to buy it at a huge discount. If its a house its sometime like 35% and 59% for a flat.

I’m perfectly in touch thank you, that is why I am consumed with constant fear every day, fighting to keep a job that supports me, and my children, with not a single other person
rely on

you won’t be any worse off, unfortunately the inheritance won’t feel like an extra, it’s just a different vehicle to support you

Don't put it in a LISA - it means you can't easily access it unless you buy or retire. You need access if your UC is reduced. A normal easy access ISA is fine. Remember - you can have £6000 in savings with no UC reduction.

If you love you new home, consider buying it under Right To Buy once you've been in it for 3 years.

I thing you’ve got the wrong end of the stick here. I think most posters are merely advising the OP that she cant keep the entire inheritance without her UC being affected. Im not taking a moral stance here - thats just how the system works and the OP didnt seem sure of that. It’s equally unhelpful some posters telling her just to spend it or hide it.

Yes
because they earn all of their income, op is quiie legitimately being partly supported by benefits she does not earn, those people who can use the £12000 as a gift are not getting that ‘free’ money
that’s just the way it is

Thank you for this, my 4 aunties all married well off men and they're very financially secure so they're a bit out of touch with benefits and stuff. I think they still think £12K is a lot of money 😅

FYI your UC deduction for savings will be £104 a month.

There’s an obsession with home ownership in this country.

If you have a council home you’re in a great position. Don’t be in a rush to give it up.

In your position I wouldn’t advise going to buy a home unless you move to a job paying significantly more, because as a single person you will be screwed if you are unable to work/lose your job and can’t afford the mortgage repayments.

Have you calculated how much those repayments would be if you bought a house? Can you afford it? I am not sure if you would even be given a mortgage depending on how much you earn.

No, some people (maybe not as many as I thought) are definitely taking a moral stance on this.

I really hope that someone can find a way around this without OP having to spend half of it on something she doesn't actually want/need. And PM her their strategy.

The ISA payment will very likely be seen as deliberate deprivation of assets and so it will be counted against your benefit payments anyway.

I completely forgot about being able to buy the house after 3 years! Oh thank you that's another brilliant idea 🥹 especially with the discount I could buy it for sure!

Oh sugar really? Even if I put £2000 in a secure ISA for her?

£6k is allowed then gets reduced £17.40 per £1000 so you would lose £104 roughly each month off what you get now

but then you have £12k so £1252 a year will be lost if you don’t spend any but if you use it as a top up then after a year you will have £4.7k over the allowed £6k and lose less each month

you would be silly to give up secure tenancy and £12k is around 10% deposit around you area you said once you include any costs meaning you would have to pay a mortgage each month

yes you could work more hours and use the help with childcare 85% when on uc - that is the only way you are going to Increase your income - but understand why you do 9-3 term time etx

so best way is to lay off any debt - use money to decorate home - carpet and furniture etc - then transport if need a car and maybe a holiday
which will knock the spare £6k down

sorry for your loss but your man would want you to use this money to help better your life

No, only dammed if you take benefits while you don’t need them.

I think it's because our parents drilled it into us all 😅 you must own a house, you must own a car, you must work yourself to death!

Yeah I was getting WAY ahead of myself and panicking more than anything. Mortgage calculator says it would be about £550 a month..I'd be getting no help with that either so it would be a huuuge struggle.

It depends on your council. My cousin moved into a council flat, and he can buy after 3 years. Some other areas don't allow it, or you have to wait longer. It is worth looking into to see the rules where you live.
Another thing... it is easy to feel like you have to do something because of the wishes of your nan. I am sure she would have seen you buying a place as being more secure housing wise, but getting a council property (which is hard and you deserve it) is just as good.

But anyway, enjoy your new place 🙂

Accept the reduced benefits. I loathe people who carry on like this. My mother's aunt was the same way, she had a big bingo win and she was hiding it all over the place rather than just taking less money from taxpayers for a while. Gross.

You mean spending it on supporting rather my taxes doing that

what a ridiculous idea hey

Can you see if there are any shared ownership schemes in your area? Buy a share with the deposit and small mortgage, then rent the rest?

Yes parents who bought houses pre-2000 when house prices were reasonable and affordable even for single income households! 😆 Different era now and some people are clueless.

I am sure your gran didn’t leave this for you to struggle. I agree with your idea to use a chunk of it to pay off some (or all) of your car repayments.

I had a friend with a feckless husband. When she inherited from her grandmother somehow she and her mother arranged legally for her mother to hold it in trust for her. Paying out if the daughter and children needed something.