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.

No problem- I'm a welfare benefits specialist, and thought best to pop in with some factual info 😊 you will always get some contributors who leap on you immediately screaming 'scrounger' - just rise above it.

There's lots of things on your list that would certainly help me, I've "made do" a lot in life when it's come to furniture, phones, car etc. It would be nice to pay the car off for instance and not have that to worry about paying for each month. My phone is very old now but I've never been one to keep up with the latest tech either 😅 I think giving DD a secure future is what I'd love to do most. Maybe a decent week away next summer too! Thank you 😊

She IS entitled to UC with the relevant tariff deduction as per the 2013 regulations unless the sum exceeds £16,000. "She is not entitled to tax payer funded benefits" is incorrect in these circumstances. At least check your facts before attacking, it's embarrassing otherwise. This tax payer who works in the relevant field does know the regulations.

By "normal people", do you mean people not on UC?

If you are not on UC, an inheritance of £12k is a nice addition to your life. You can spend it as you wish.
If you are on UC, even on the pittance that is the amount for carers, it can be a worry and almost a burden.
Unless it is a huge lifechanging amount, as in £100k and above, getting the amount OP has can really mess things up benefits wise.

She will be getting £12k. She will still be on UC on that amount anyway. The cut off is £16k.

Lots of others have a mortgage on UC and have to manage. 🤷

You are wrong

And also bitter

Yes indeed. I think a nice grey rock 🗻 would serve best for Cheesemaker on this thread.

I would not open an ISA in your daughters name as you will not be able to access it. You could explore the Lisa and I would pay off the car loan. It is a nice gift but not enough to buy a house if you have a low income. Use some to make the house nice and keep some as a buffer even if it takes you over the savings limit. Once you get down to £6k you can reapply for UC.

Yes she did, she always wanted me to buy a place as I was still on the waiting list to get out of my awful private rented flat before we got this house. I'm sure if she was still here she would want this money to be spent on doing the place up a bit, saving some and then just being happy ❤️

How many managed to secure a mortgage when on UC?
It is different to having a mortgage then finding you need to claim UC.

Yes...

I’m sorry about your nan, but I’m struggling with the logic here. You’ve unexpectedly inherited nearly £12,000 and you’re worried about being financially worse off because Universal Credit might reduce if you keep it?
Most people who have £12,000 in savings have to use their own money to live and don’t get their rent paid for them. Plenty of people work full-time, pay significant amounts of tax and have spent years scrimping and saving to buy or pay off their homes, with absolutely no help towards their mortgage or repairs.
You haven’t done anything wrong by inheriting the money, but I’m not sure why the expectation is that you should be able to keep £12,000 in the bank while taxpayers continue funding your living costs exactly as before. I need to sleep as I work about 60 hours a week to pay my own bills and a tax bill to keep all the entitled people like you.

@Cheesemaker26 How do you know “most” agree with you? Personally, I don’t look down on Op or see her as a scrounger

I don’t know her situation but she is having to do the job of the two adults responsible for her child, since it sounds like the father doesn’t contribute much if at all (?). And she’s doing a valuable job by working in a school. Just because her job doesn’t pay well, doesn’t mean she isn’t contributing to society in other ways through the work she does.

I’m glad that she has secure housing and now this lovely gift from her Gran. Paying off debts isn’t hiding it.

She is just looking for legal ways to manage this additional money so that it doesn’t adversely affect her monthly income. That’s a normal reasonable thing to do.

I am curious - Do you criticise all the people who have accountants who look for legal ways to pay the least tax possible?

And btw she is IS entitled to UC, from what I’ve read here she would get around £100 deducted if she keeps the whole 12k in the bank. And if she pays her car debts and goes on a holiday and gets it down to below 6K it won’t affect her UC at all.

OP, firstly sorry for the loss of your granny. Lovely of her to leave something to you.
There’s been some vitriol towards your post and I hope you don’t take this in the same way…but given your child is now 6, could you look to get a full time job and use wraparound care and holiday clubs etc, thereby coming off benefits.
At which point, it’s nothing to do with the state what you do or don’t so with the money and you could legitimately start saving up for a deposit for a house for yourself and your child? The £12k has given you a good head start, especially if you can get a place for around the £110k mark.

Sorry but if you have money, you don't need as much UC. UC isn't there so you can hoarde money. Heck, I wish I could get it so I could get some money saved up! But it doesn't - and shouldn't! - work that way.

If it was me, and I was dead set on "hiding" the money, I'd invest in something material that I could sell later on for more money.

Buy a car, go on holiday and get something nice for your dd, maybe set her room up nice for when she’s older, buy some nice furniture & appliances for your home. After that you can keep upto £6k in savings. The benefits system isn’t set up for people on benefits to save up for a home deposit or their future.

Do that then. Don't feel bad it is not buying a place. As others have said, getting a council place is just as good, and if things improve for you later on, you may have the option to buy.
Help to Save is good too.. you are on UC and work
https://www.gov.uk/get-help-savings-low-income

Who is the executor? I wonder if you could reject the inheritance and ask for it to be passed over to your mother instead. Then I’d get my mother to set up an ISA for my child and get them to sling the 12k in there for them to use for a car or uni fees when they’re older.

£12 is not a great deal of money to dispose of so its no a life changing amount of money. As other PP have pointed out you are allowed £6 in savings. You can easily spend the rest on ways that are not deprivation of capital such as a family type car/driving lessons (if necessary) paying off any loans or credit cards, white goods, normal household furnishings. Ignore the people who are getting at you because you are on UC. If it were 120K then my advice would be different.

I think your dear gran bless her, died with the mindset that it was still the 1980s. £12K wouldn't scratch the surface now when it comes to buying a house. Houses aren't £25K anymore nanna!

As a pp said, what is this obsession some people have about HAVING to buy a house? My DH's auntie used to say 'it's character building buying a house!' as she was drowning in debt from all the loans she had taken out for essential repairs and maintenance on a house she could barely afford, and was working all the hours God sends just to be able to afford the mortgage!

Like a few certain posters on here, I think she just wanted people to be as miserable and poor as her.

Character building my arse! 😆 Debt building more like!

It's lovely of you to think of your daughter but I'd keep a rainy day account for yourself, within the allowable limit. It will take a lot of pressure off you to know you can replace your washing machine when you have need or something of that nature. It is awful budgeting down to the last penny when you are low incomed and a crisis happens. This could cushion you for years if used carefully.

I hate to break this to you but your opinion doesn't represent all people. Unless you somehow are a plural all by yourself? And as you have absolutely no idea of her real life experience, you also can't say she won't have had much experience of honesty. Although, frankly, you lost any credibility to claim the moral high ground with the immediate and unpleasant attacks, so I doubt your judgement counts for a great deal.

I think you can defer part or all of your inheritance to your DD directly without it affecting benefits. You’d have to do it officially. Could ask the CAB

Actually according to many posters better informed than you, she IS entitled to claim those benefits! 🙌

No you don’t! I bought my house with a 5% deposit and paid very little in solicitors fees as I wasn’t selling anything. I had about 11k, if she puts the 12k in a LISA it will also be added to. If she does this over the next 3 years she would have an extra 3k.