Splitting up - what happens to the profit from the house sale?

friendofchocolate

I am a SAHM and as my youngest is only 18mths I don't really have any realistic prospect of getting full time work outside the home for at least another couple of years. I do a bit off freelance work but this only brings in maybe £1000-£1500 a year.

We are splitting up and with the profit from the house we'll probably end up with about £40k each. What I would like to know is what can be done with this? It's obviously not enough to buy somewhere else and I wouldn't get a mortgage anyway with no job. What I would want to do is put it in some kind of bond for a few years until my youngest is at school, at which point I can get a job again. Or even lock it away for 10 years until my oldest goes to university!

But I suspect that I will be obliged to simply fritter it away on rent and food until it's all gone - is that right? Thank you for any advice.

newcook

I hate to ask but how else would you expect to pay rent?

HappyMJ

You can ring-fence it for 12 months for the purpose of buying a house but it is more likely you will have to use it on rent. Once your £40,000 becomes less than £16,000 then you can claim housing benefit to help pay the rent. You can use some of the £40,000 to purchase new furniture and repay some debts you have (especially overdrafts and credit cards) so you might be able to get below £16,000 quicker than you think. Keep receipts for everything in case you need to claim as they need to see where nearly every penny has gone.

You can save small amounts into a child savings bond without being accused of hiding it for benefits. But that's only £25 a month. It's not going to make much of a dent into it.

Make sure every expense you have is paid up 12 months in advance as well. Instead of paying car insurance , tv licence and car tax in instalments switch to annually in advance.....and don't live frugally...get the cupboard full of groceries that will last a long time....but keep receipts again.

friendofchocolate

Housing benefit, until I get a job? Why should I have to fritter away the money I have accumulated through hard work, simply because I am now caring for my young children? No point me getting a job which will be totally negated by childcare costs anyway. My ex-partner will not have to do this with his £40k - he can invest it, put down a deposit on a second property, etc etc. Fair?

Sorry if I'm being naive - I obviously am - and about to get flamed, I suspect. Can't I give it to someone in trust for my children? What would actually happen if I locked it away for 10 years in a bond with no access?

tea_lover

How is spending it on rent 'frittering it away'? Surely a roof over your heads should be a priority?

friendofchocolate

Thanks for that, Happy, that was helpful.

thorsoak

Your OH will, of course be paying child maintenance, won't he? Had you thought about staying in the same house, and re-negotiating the mortgage - paying interest only until the children are at school and you could re-enter the job market?

When there are children involved, you may well have a right to stay in the house (provided of course that the mortgage is paid) and your OH may have to wait until the children are out of education before he gets back any equity that he held/holds in the house. He could also be put in the position of guaranteeing your mortgage.

friendofchocolate

I guess I need to adjust my expectations. The prospect of never owing a property again - which is what it probably comes down to - just sucks, while ex-p has no such problem, and all because I'm choosing to care for my OWN children.

friendofchocolate

Yes, Thorsoak, but I've no idea how much that will be - can't imagine it would cover rent & bills?

Dawning

You need to adjust your mindset. You will be paying an essential living expense. I am guessing you see paying rent as 'frittering' money because you have the homeowner mindset?
I had the same thing when I got divorced. Had never rented, always had my own home (and mortgage). My exH kept our house, meanwhile I was 'having' to pay rent.
It ended up that I paid rent for two years, at the end of which I had only about £6k left. It is demoralising until you realise that it's just a fact of your new life. You can't let yourself get stuck thinking like this.

Crossposted with post #8

Mrs_Imp

I suspect you'll have people wondering why you should get HB etc when you've just made 40k on the sale of your house.

Rent and food is not frittering, and 40k should see you right for some time, especially if you'll be getting child support from your ex.