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 don’t think it would work in the UK, but to be fair a lot of countries do have a flat rate of income tax, including some in the EU. The U.K. is more about wealth distribution, and our tax burden is such that we couldn’t take the hit of reducing tax bands given the top 10% pay 60% of income tax take. The country is in a lot of trouble, huge debt burden, massive interest payments due. I think that the next budget will be increasing taxes further

Id say keep very little money in an account like this - with inflation where it is you’re losing money relying just on the interest rates. Stocks and shares accounts are much better for growth

Again, the point is that they only show a 3.6% return because they are putting everything they can through tax avoidance schemes. If they paid their workers more, there would be more tax going in and less poverty. But you’re not really interested in discussing any solutions that aren’t squeezing the poorest people, so I don’t think I have any interest in continuing this conversation with you.

Yes agreed on various fronts. I think one of the main issues would be the transition. Not looking forward to the next budget!

But tax avoidance is legal? And sensible. That’s why we are encouraging the use of ISAs for example

Yes, returns on diversified investments average 10%, but OP has to be on it for the long game and be prepared to lock away the money for 5+ years, in case there’s a dip (or rather, when the next big dip is—there is always a dip coming in the stock market—we just don’t know when).

ISAs don’t provide any tax avoidance for OP—she doesn’t have enough savings to surpass the £1000 interest threshold.

I didn’t say it wasn’t legal. You’re the one on your high horse about perfectly legal use of benefits.

I think you’re misreading or deliberately misrepresenting my posts. Nowhere have I advocated for squeezing the poorest. I’ve suggested treating everyone the same, not targeting one particular grouping. You on the other hand

Except for the person on MW - that’s the difference between heating their home well or living in a cold damp environment, buying decent food or whatever is BOGOF.

For the Billionaire it makes no difference at all. Once you reach a certain level of wealth, more money doesn’t buy you more comfort or happiness.

I don’t think a civilised society should allow some to accrue so much wealth that there can never be any kind of social mobility any more. Where some people own multiple houses and fly by private jet, whilst some people struggle to afford to feed themselves.

But that’s just my moral compass.

Slavery was once legal.
Beating your wife was once legal.

Legal doesn’t necessarily equate to morally or ethically right.

I on the other hand what?

I have advocated for people in difficult circumstances using the benefits they are entitled to, without judgement or trying to push them to “do better” which is only your opinion of what is better anyway.

You are arguing with people saying that more taxes could be taken from the profits of large corporations - what do they need it for anyway? Corporations do not have dependent children, and their workers are taxed on their own earnings, so how would it hurt the corporations to pay their workers more and therefore have less profits?

I haven’t said anything at all about taxing rich people, I pointed out plenty of rich people have said they would volunteer to pay more taxes or that lots of net contributors don’t begrudge the welfare system.

Is it ethically wrong for us to open ISAs?

I thought the government introduced them to nudge people toward saving, with the end result being that people have more built up in retirement/less reliance on the state?

No exactly, and I can’t help but remember ExpectMore’s earlier posts full of incredulity that the OP should use the money her nan had left her in a perfectly legal way because she didn’t agree with the benefits system allowing it.

I have first hand experience of the disability benefits system - both through disability myself and over twenty years experience in professional disability support. The assessment and awards system is loaded against the claimant from the start and isn’t fit for purpose. Every single system that’s preceded PIP has been the same. From assessment providers who pay their staff bonuses for speeding through assessments to assessors who in very many cases are being asked to assess claimants far beyond their experience or pay grade. When you have an assessor who is a nurse, who can dismiss a consultant’s report in favour of their own ‘observations’ something has gone badly wrong.

I’ve supported claimants at assessment and I can tell you from experience complex disability is summed up in a series of points which often don’t reflect the actual level of disability because the assessor doesn’t fully understand the condition. And the starting point is always that the claimant isn’t being truthful.

I’ve supported at tribunal and DWP has been roundly and repeatedly criticised for forcing vulnerable claimants to go to expensive tribunal when it’s perfectly clear that they are entitled to benefits - that’s now got to the point where the chairman of the tribunal service has put forward a proposal to fine DWP for every claimant who is successful in their appeal - that’s 66% of all claimants who go through the tribunal service. That should tell you everything you need to know.

The way we treat our sick and disabled people in the UK is far behind the rest of Europe. It’s been like that since care in the community was introduced and these support benefits were rolled out in place of institutionalisation. The poor attitudes ingrained in this country are mainly on the part of each successive government for kicking the can down the road instead of ensuring that disabled people get proper support. I can’t see any evidence of that changing considering that within five minutes of coming to power this Labour government tried to force through changes to disability benefits that were clearly unworkable and written on the back of a ciggie packet.

Yes indeed. Which as I recall started off with her statement about feckless and lazy benefit claimants then a campaign to try and convince us all that she only meant the ones that SHE considers to be feckless and lazy...Because of course she would categorically know everyone's unique circumstances thereby enabling her to make this highly informed judgement.

Same here, same experiences. Hear hear 👏 Tribunals are one of the hardest and most emotionally draining (for my clients) part of my job.

Show me any government in the last couple of decades that has given a monkeys about democracy and enacting policies within their mandate ? In fact show me a government that gives a monkeys about the electorate themselves ?

And in effect you did say claimants should be penniless - I believe it was along the lines of having pennies in the bank meant that they shouldn’t be claiming UC. How do you think that would work ? Given that low wages are topped up by UC, no savings thresholds would mean that benefit would stop the minute the claimant’s wages hit their bank account - indeed the benefit payments themselves would do the same thing and they would be liable to repay it. How would that work ?

I have to admit, I did spot that, but decided not to say anything as I’m pretty sure it’d have been misinterpreted as an “attack”, again.

They’re really only worth it if you’ve got £30k/£40k in them (dependent on the interest rate) or anticipate a high capital gain that’d exceed your capital gains allowance.

They’re pretty pointless otherwise and I actually think it’s a sad that people don’t understand this and put their money in them (particularly savings rather than investment ISAs) thinking they’re doing good for themselves.

I’m all for social mobility. Our current “progressive” tax regime actively disincentives it. That’s the whole point!

You’ve just hit the nail on the point I was making previously 😉

just because the government state something doesn’t mean it’s right…. And the government isn’t some disconnected set of others. They’re representatives of the people and it’s for us to advocate for what we want them to enact as the law.

Corporations aren’t disconnected from people… they’re owned by shareholders: people.

routinely people in the form of the likes of you and I saving for our retirements (ie pension funds).

Cant you see that?

I know. Hence my point that I think we should be doing much better for those on disabilities.

it should be less onerous and more generous for those that truly need support. I’ve come across some horror stories that really make me wonder where our compassion for those that are unable to look after themselves has gone.

I think you’re being deliberately facetious

But what you are advocating for is a system that allows a few people to get rich by exploiting their workers and avoiding contributing (sometimes at all, let alone proportionally) while the people with the hardest circumstances and the least prospects get exploited and are not allowed to have a few thousand pounds worth of buffer. Can’t you see that?