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.

You seem to think that this money shouldn’t be used to support you. If you have money, it should be used to pay for yourself so obviously you should lose benefits.

don't buy a house! you have won the lottery with a council house.

Where have I said about hiding it...in any of these replies or my post. I loathe people who jump to conclusions and look down on people. Calm down.

The simple fact is if you come into money while you are on means tested benefit the you will lose your uc if this amount takes you over the limit. You could buy a better car or put a deposit down on a house though its probably not enough for that.

Unfortunately there aren't any schemes like this in my area yet 😕

Yes I am
whilst she has the money it funds her rather than taxes

or you put your child in childcare, work lots of hours, claim no benefits and then the inheritance is yours

lots of us have to do that

No. What makes me gasp is that there are currently almost 180,000 children living in totally unsuitable, temporary accommodation in England. There is always someone worse off than you.
£12k isn’t enough to buy a property, factoring in all the costs, but op is still very fortunate to have it and should accept the reduced benefits accordingly.

Honestly what a crock of shit. I hate these benefit bashing people. You literally have no clue how hard it is with a huge increase in the cost of living.

I live in the South, work full time and the UC doesnt even cover half my rent.

OP I wish you could just enjoy the money somehow like your nana would have wanted.

See if anywhere locally does financial advice for a reasonable price or free. CAP UK (Christian's Against Poverty) do it, but there may be other places locally or even your bank might be able to recommend somewhere. Yes you don't want to spend too much of the 12k on financial advice, but you clearly want to save what you can while still not cheating the benefits system and that's understandable and honest, and some cost is worth your piece of mind.

She will still be on UC with £12k in the bank. It stops at £16k.

How are you planning to oay a mortgage of say 600 a month plus maintenance eg new boiler and insurances council tax etc on your low salary?
Youbetter off staying in council house.
Spend some money on car and driving lessons and a holiday

It's ok, my right to loathe people who whine about hiding money while on benefits trumps your right to pretend to be offended by taxpayers who pay your bills pointing out you shouldn't be whining about hiding money while on benefits.

You have the hide of a rhinocerous, so obviously you won't listen. But you shouldn't go around admitting this in public. People will rightfully look down on you. As I do.

OP has not said any of that or even implied it.
Who hurt you?

OP if it helps think of it this way..Your lovely nan has left you £12k better off. Some of that is extra money for you to spend as you wish, some of it is to be spent on replacing the UC you would have claimed. She has still made your life a bit easier and Im sure thats what she wanted to do.

These are examples of spending that don't constitute deprivation of assets:

Paying off debts: Clearing existing loans, credit cards, or a mortgage.

Day-to-day living: Covering normal household expenses, utility bills, and food.

Home maintenance and repairs: Making necessary structural alterations, repairs, or improvements to your own home while in good health.

Regular gifting: Giving small, customary gifts (such as for birthdays or Christmas) that follow a long-established, historical pattern.

Charitable donations: Making contributions that match a documented history of past charitable giving.

Reasonable lifestyle choices: Enjoying a standard holiday or purchasing reasonable personal items.

So maybe think about ways of spending £6k in line with the above. Do you or your dd need any clothes/shoes? Is she growing fast so you might want to buy some things in the next size or 2 up?
Decorating the house. Necessary furniture.
How old is dd? Will she need a desk/laptop for homework if approaching secondary school?
Reasonable Christmas presents and a holiday.
Stocking up on some non-perishable store cupboard items and tins of food per government guidance.

I'd suggest talking to CAB or Welfare Rights for advice. I'd be looking at the option of putting it in savings for my DS but I'm not sure if that would count as your capital or deprivation of assets. Unfortunately it looks like buying a home is not a realistic option for you right now, but you may still feel like your honouring what your nan wanted by putting it away so your DS has the opportunity to invest in property once he's in employment.

Exactly.

@Stressedmum6761 please don’t let comments like that taint this lovely moment for you.

@Ophy83 post contains a lot of good ideas for how to (legally) handle the money.

OP, if it were me (and I came from humble beginnings and have worked my way up) - I'd put these towards a deposit for a house - don't cash the chq until the last minute and save, save save to get the rest. Or ask to have 2 cheqs of 6k each so that you can put one lot in premium bonds and hopefully win a million!

Mortgage payments on a90k mortgage will be about £550, could you afford that without the housing element of UC?

Buy a house that needs a lot of work (but in the right area). With home ownership comes freedom, so do everything you can to aim for that.

Live for today
you have a young child still at school who needs child care, so a minimum paid job in holidays will take quite a chunk if it so for now do the hours your doing.

so stay in the council house. Buy some new furniture and items you need tv, cooker fridge . A cheap Holiday either before Sept or Oct hols
Your allowed 6k saving on UC so put that in an isa , and use the other for the above to give you a nice home to come home to.

It’s ok having a private house but you are liable for every maintenance job needed on it and some very expensive. Roof, wood worm , new kitchen , bathroom it’s never ending over the years. Plus your bills like CT Water mortgage

There are some spiteful people on here. The first £6000 of capital won’t affect your uc in any way. Realistically you have £6k to play with. I doubt if you will be seen as wilfully depriving yourself of assets if you spend it wisely on stuff you need. Pay off your car loan and spend the rest on furniture. It’ll help you get comfortable in your new home and you can build a future to make your Nan proud x
eta just seen @Mancity08 post after writing this and I agree 100%

Speak to a mortgage broker in your area who specialises in getting mortgages for the hard to mortgage eg low income, self employed etc
You might find £12 is enough for a deposit but you're best speaking to a professional. They usually offer free advice initially to go through the options.
My sister and her dp recently got a mortgage at age 53 and 55 with a deposit of around £14k on a house worth £155k through a broker.

OP, buying a house may not be the best thing for you at the moment. As you say, there are extra costs associated with owning, and anyway you don't think your current salary is high enough for a mortgage.
In many ways a council rental is a good deal, and you've already done some decorating on yours. If you don't buy you will have to use some of your capital for your living expenses; I make the deduction £101.76 per month. But you can spend reasonable amounts on treats and some money on training to improve your chances of a better job. Your nanny would ideally have liked you to buy a home, but if it's not possible, she'd want to know the money helped in other ways.

Don’t panic you are within capital limit to get UC which is £16000. As you’ve calculated UC deduct £4.35 for every £250 above £6k. However this is because they assume you will get interest on your savings which offsets the reduction in income. There are accounts where you can get 5% on savings currently - see moneysavingexpert. You could withdraw the interest monthly to make up for UC deducted and leave the £12k intact.

You should also look at the help to save scheme as if you save £50 per month the govt will top it up with a bonus of 50% after 2 and 4 years which is a great deal.

I think you are forgetting you will earn interest.

You're a very strange individual.