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'm a welfare benefits specialist with 15 years experience. So, no, sorry, it will not bite the OP anywhere other than under the tariff deduction regulations at £4.35 per £250 over £6,000 of her inheritance, subject to any acceptable debts or other expenses she chooses to pay first out of the inheritance. Your own experience is completely different and came under different UC regs.

I did that once, to a particular person who seemed to sneer at people who have part time and lower paid jobs as though they weren't good enough. It was a push back as it was very frustrating to be personally attacked by a people who looked down their nose at people who received benefits, who i think completely outweigh the people on this thread who actually have offered any sound advice.

Can you pay off your car, put £6k into an ISA for yourself, pay for a few things in your house and put the rest into a private pension for yourself or an ISA for your daughter? Do not give up your council house. Buying would be daft as you are then liable for all repairs, which I think would be tough

There’s so much wrong with this post I don’t know where to start.

Nope. OP is allowed to keep £6k as savings before UC is reduced. She’s also allowed to pay of the £2.5k of legally recoverable debt she’s carrying in the form of a car loan and credit card debt/overdraft. She’s also allowed to buy essential and everyday items for her new home so at the most would be around £2k over the threshold and her benefit would be minimally reduced but not stopped. Everyday spending would eventually take her under the threshold.

Paying off her full debt is fine but if she’s still above the £6k threshold after this, anything put into an ISA or private pension would be viewed as deprivation of capital in order to get under the savings threshold. The sum would be treated as notional capital and as though OP still had it for benefit purposes. Essential items for her home and day to day spending are the best way to go after debts are paid.

I responded to this earlier- it was quite alarming.

“Her dad sees her every other weekend and pays the bare minimum.”

Some of the anger about the need for UC to support a hard working single mum should be directed to the father. If he took on his fair share of childcare, may be the OP woukd be in a position to increase her qualifications to earn more. If he paid a fair share, may be the OP would no longer need UC.

The rest of the anger HAS to be directed at a system that allows someone to be paid so poorly, despite working full time AND raising a child, can’t afford to live without state help. We need people in these low paid roles. They are essential. We can’t have everyone moving into higher paid roles. So we need to change the system so that these low paid roles, that are essential to a functioning society, are paid enough so that people can live. And we need wealth redistribution and a wealth tax.

Any anger towards the OP is completely misplaced. She’s is exactly what we want in society. Hard working. Dedicated parent. Clearly being careful with money and with an eye on future financial stability.

So we should be angry that the OP needs UC. But with the system that has created this scenario and the lazy father who could be doing much more.

A lot of people come to MN after googling their predicament. Sad to think there will be people out there googling about similar issues to OP, only to find this thread and all the wrong advice and judgement.

I always say it is best to use Reddit for anything benefit advice related. They have verified DWP staff on there, and further discussions and judgements about benefits are not allowed.

I remember a thread on MN where OP was asking about how many nights her BF could stay, and someone told her that if she made him a cup of tea and used her wifi then the DWP would consider them living together.

I get what you mean, but CMS payments are not taken into account for UC anyway.
He could be sending her £1kpm, and she would still get the same in UC she does now.

But she might not need to claim then.

That would be up to her though. She would still be eligible for UC.

Im sorry you’ve lost your nan, OP.
im also sorry the MN posse are laying into you. I was bought up by people on benefits who for the most part struggled to get off them so I totally understand how meaningful this money is to you and that you want to think carefully about doing sth with it that changes your circumstances. I dontcthi k that’s outside of the spirit of benefits.
i know you’re feeling the stress of the responsibility of this gift. I’d say give yourself some time and perhaps seek some advice: CAB might be able to help you or give some insight into what this could mean. May also help to see a financial advisor.
I hope this small amount is a stepping stone to the life you want and better options. X

Yes, indeed. I spend plenty of my time at work unravelling and explaining the rules. One of the most common, as illustrated here, is the difference between what is classed as income- both earned and unearned- and capital and savings.

This; there is a misconception that child maintenance is deducted from UC. On the old legacy benefits system this happened to an extent; with UC it was abolished as it was deemed, rightly in my professional experience, too problematic for a system that assesses income monthly and any changes to income in an assessment period don't kick in until the next month. With the well documented issues with child maintenance as well, especially inconsistent, erratic or non payment, it was decided it would not be a deductible.