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 am a mortgage adviser most lenders take universal credit into account when assessing your mortgage affordability so if you want to buy then it’s definitely something you can look at

I admit I've only read the first page so apologies if this is repeat advice. Are there any shared ownership homes in your area? You do have to pay the mortgage yourself but the rent portion can still be covered by the housing element of UC. So you shouldn't be left significantly worse off and can potentially staircase ownership in future meaning that once you're earning more you can buy a larger percentage and eventually not rely on UC at all.

One of my friends did this after divorce, she couldn't afford to buy alone but got a shared ownership place.

You make sure you keep your current home op.
So happy for you you have it

It doesn't sound feasible for you to manage a mortgage on your own. If you fall behind and have to sell at a time when prices are down (and property prices in many areas are not going up and some are going down) the money can be all lost anyway. Even having to sell when prices were doing OK would mean money wasted on all of the fees that go with buying and selling. Unless your family want to be your mortgage guarantors, buying doesn't sound sensible. Your Nanny wanted it for you but she was not thinking about the reality of the current economic times if she made that stipulation for the gift.

Speak to a mortgage lender anyway to found out the costs, you probably wouldn't be approved. Try to speak to someone at Shelter or Citizen's advice about what it is OK to spend the money on. I suppose some people manage to hide it but the system now is that they will pick up on money paid into your account.

This is what gov.uk say bout spending inheritance

If you knowingly reduce your money, savings and investments, or transfer them elsewhere to get or increase your Universal Credit, this is known as ‘deprivation of capital’.
You have not knowingly reduced your money, savings and investments if it has been used to:

• pay off or reduce a debt
• pay for goods and services that were reasonable in your circumstances

If we decide you’ve deliberately reduced your money, savings or investments, your Universal Credit is based on you still having it. This is called ‘notional capital’.

I think people are being a bit harsh here, OP appears to be a single mum on a low wage trying to work around childcare needs. I wouldn’t encourage people to stay on benefits long term but Op has got a windfall that won’t last long and is actually quite disruptive in some ways.

OP get anything sorted that needs to be sorted thats reasonable, dental care, transport, things your DD requires (not would like but requires, school uniform etc). Whatever you do, do not spunk it away, it’s reasonable you spend some of your own money on your own life but equally i understand why it’s difficult.

The reduction would be £4.35 of the UC amount per every £250 over £6,000, and reassessed for applicable reduction when OP updates the amount going forward. Only at £16,000 does entitlement stop completely unless there is a relevant disregard e.g. personal injuries compensation.

Misery loves company eh?

"I have a hard time and work my fingers to the bone and get NO HELP so I want everyone else to suffer like me."

@Stressedmum6761 Pay no attention. Do what's best for you. Hope you find a way to stay on UC, and not have it reduced, and make good use of the £12K, and do definitely keep your council property.

!

No, I'm not. But you already know that.

By the way, the vast majority of people who aren't sponging off the state will feel precisely as I do. So do keep your attempts to hide your windfall so you can keep getting taxpayer funded benefits to yourself. Genuine advice.

I literally found out I got a £12K inheritance not even 24 hours ago. And that makes me a sponger? Get real 😂

Again. Not anywhere have I said I want to commit fraud..go off hun 👋

You received a windfall and came here 12 hours later to find ways to hide it or use it without affecting your taxpayer funded benefits. Sponger sound fair.

I don't actually care. Just letting you know that this is precisely what most people will think when you actually have the nerve to say these things out loud. I get that you're offended by that. Good.

This is such a good post. Put the £12k in an ISA - you'll get around £40 a month so your UC is only reduced by £60 a month which isn't so bad.

I definitely wouldn't blow £6k on whim just to get savings down to £6k

FFS, OP Is not wanting to hide her windfall.
Her nan wanted her to use it to buy a place and she is wondering if she can.

One thing that stood out to me about your post is that she passed away and expressed her wishes for the use of the money before you had secure housing in the form of a council house.

Would she have wanted you to give that up to buy a house you'll struggle to afford?

Can you make other good use of the money? Like decorating your new home, buying school uniform, training for you to improve your earning potential, after school activities for your child you wouldn't otherwise be able to afford, a modest holiday etc? Would she have preferred that to making your housing situation more precarious?

You’ve just moved into a council house. I wouldn’t be planning to buy unless your income increases (which it may be able to do when your DD is older and you don’t need the holidays off). I would put 5.8k(ish) away in long term investments (and use the return you get for Christmases or over the holidays so it doesn’t take you over the UC limit). With the rest, accept reduced UC until it’s gone, but put the money towards things you need of a quality that will last.

Do you need, for instance, a decent bed or sofa for your new home? A reliable car? An economical washing machine/fridge freezer, etc.? If you have a garden, would you be interested in growing food in it? Or do you need to replace your phone and could buy it outright instead of replacing on a plan?

Not anything frivolous, but items you need - possibly ones that are perhaps more expensive than you would otherwise buy but will last longer or cost less to maintain. It also isn’t unreasonable to take a holiday with your DC and make some memories, though thousands on a holiday of a lifetime might be pushing things. Try and think of capital costs that will help you out over the next few years, improve your quality of life and cut your day to day expenditure. But not things that will cost more to maintain because the money’s going to go and you’ll be left with those additional expenses and no way to cover them.

Also there are so many angry people on MN. Don't get brought down by them.

@Cheesemaker26 what on earth are you on about? The OP is not a sponger. What a rude and unpleasant thing to say. She says clearly in her OP that she works, and gets help with UC as she has children, and her job doesn't pay well.

What a nasty thing to call her 'a sponger.'

Have a word with yourself!

Even if she WAS on full benefits, that's still a nasty thing to call her. People who are on benefits are not spongers! They are people in a precarious position who need help from the state.

Oh, and the OP hasn't said she is about to commit fraud! Please stop!

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Nasty comment. Ignore this rubbish, OP.

As I previously posted your UC will be reduced by £4.35 per £250 over £6,000, just keep them updated with any reduction in what you have of the sum, they will simply ask for details of what you used it for, and accept reasonable expenses and paying off debts. You will make good use of the inheritance I'm sure 👍 good luck 😊

I don't think you can read very well. I've asked if I would be able to buy a house I don't know that amounts to me trying to hide money in your tiny little mind. Please go away and be angry on your own, I'm very sorry something has happened to you in life to be so awful.

Thank you very much for this, solid advice as I have asked for. Dont know why this person is so angry in life 🥰

Please don't let this poster get to you. Most people are on your side. Don't let them ruin your thread.

Completely not what the OP was after or is intending to do; and really unnecessary level of vitriol on your part, to be honest.

Normal people respond to a windfall with oh great, I can pay off that debt I can go on holiday or whatever. OP came her to find out how to avoid temporarily losing some of her taxpayer funded benefits now she has had an unexpected windfall.

Here's a thought, benefits are never ever meant to be a lifestyle choice. They are supposed to be there because you haven't got the money to pay for things and are on the bones of your arse.

So just use your own money to pay for your own life choices like a normal person.

And when you run out of it you can re apply for benefits.

She's not entitled to taxpayer funded benefits if she currently has enough money to pay her bills and live her life. She's not entitled to use taxpayer funded benefits as her nest egg, and she's not entitled to have a nest egg while begging money from the state.

And she's not entitled to hide money or squirrel it away or do anything else at all with that money while taking money she does not actually currently need from taxpayers.

Keep defending her if you like. You're wrong to do so.

ChatGPT reckons you can keep 6k savings without it affecting your UC and you can clear debt, buy a car with the other cash… maybe go see a benefits advisor? You deserve a break and if you’ve not got a loan to pay, you can perhaps save in premium bonds for your daughter…

Nope, just being honest. She won't have heard much of that in real life. Good to know she now knows how people really see her.