Is a Personal Injury Trust always worthwhile?

Jenna64

Hello

Wondering if anyone can help. I've been on housing benefit since the loss of my husband 2 years ago. (never been on benefits before). I've received some personal injury compensation amounting to £14,000.

I am going to let hb know of course, but at the moment have solicitors advising me to place it into a PI trust. I'm a little confused because I know you can have up to £16,000 and still receive benefits, although at a reduced rate.

My poor brain can't decide which is best. How would one do the calculations?

I would really appreciate any responses as I don't have any family left that can advise me on this. Thank you. :-)

TELLIT01

Being a cynical soul I wonder if the solicitors will charge for setting up the trust, and if there will be an annual charge for managing the same. With many benefits PI compensation is ignored for a period. I don't know if that is the case with HB.

Jenna64

Thanks.

I've been told it's a one off payment. I'll look out for any further costs.

The main thing I'm wondering is how much housing benefit would I lose on each payment due to having the £14,000? Because if I knew that, I'd know whether the PI trust is worth the one payment or not, or whether I'm better off just losing the small amount of housing benefit? I just want to do the most sensible thing.

I know the amount is disregarded for 52 weeks.

xylophone

https://www.clarkewillmott.com/wp-content/uploads/2016/07/Personal-injury-trusts-factsheet.pdf

may be worth a look.

Jenna64

thanks Xylophone.

Anyone else know how to do the calculations? I've heard you lose a pound per benefit payment if you have over £6000 in savings. Anyone know if that's correct? So for fortnightly payments that would be £2 per month that would come out of my hb?

Just not sure if the PI trust is worth paying for at £400 if only a small amount of benefit is kept back, but I've no idea where to find out or do the calculations.

If anyone knows this stuff I'd be really grateful, as it will help me make a decision. thanks.

Placitasgirl

Deductions from Housing Benefit are made when you have savings in excess of £6000. £1 per week will be deducted for each whole £250 of capital above this amount.

You will need to check whether your PI payment will be counted as "capital" or "savings" or may be excluded.

xylophone

http://www.markthompsonlaw.com/i-have-received-personal-injury-compensation-and-i-claim-means-tested-benefits/personal-injury-trust-to-protect-personal-injury-compensation/

More pros and cons above.

Jenna64

Placitasgirl wrote: »

Deductions from Housing Benefit are made when you have savings in excess of £6000. £1 per week will be deducted for each whole £250 of capital above this amount.

You will need to check whether your PI payment will be counted as "capital" or "savings" or may be excluded.

Thanks Placitasgirl

I think that would mean I'd have £32 deducted each week, but I'll have to check again, maths is not my strong point.

Jenna64

Thanks xylophone

The site looks pretty comprehensive. (i'm not allowed to quote you because of the link, as I'm new, but I'm referring to the Mark Thompson site)