Inheritance whilst on Universal Credit

alisondrew823

I am due to receive an inheritance of cash, estimated to be in excess of £150,000 from a deceased family member but I am getting concerned as I am currently on Universal credit with limited capacity for work.  A friend has told me that he was in a similar situation and was allowed a 12 month time limit to spend the money.
I would ideally like to purchase my own home if the amount received would allow but I need to know if the benefit agency would stop my payments or allow me to purchase my own home as I would then no longer need to be in receipt of housing benefit.
Any advice would be extremely welcome.  Many thanks

poppy12345

alisondrew823 said:

I am due to receive an inheritance of cash, estimated to be in excess of £150,000 from a deceased family member but I am getting concerned as I am currently on Universal credit with limited capacity for work.  A friend has told me that he was in a similar situation and was allowed a 12 month time limit to spend the money.
I would ideally like to purchase my own home if the amount received would allow but I need to know if the benefit agency would stop my payments or allow me to purchase my own home as I would then no longer need to be in receipt of housing benefit.
Any advice would be extremely welcome.  Many thanks

The inheritance will not be excluded from the savings rule for 12 months, i'm not sure why your friend told you this. Once you receive the money into your bank you will need to report the changes onto your journal and all your UC will end. If you're claiming council tax reduction then this will also end.

You can of course buy a house with the money and it won't be classed as deprivation of capital. Once your money goes below £16,000 you will then be able to reclaim UC. Any savings left of more than £6,000 will see a reduction of £4.35 per month for every £250 over that amount.

tacpot12

You may benefit from knowing that if you deposit this large sum into your bank account it is protected for upto six months by the Financial Services Compensation Scheme, but after six months the amount protected drops to £85,000, so you may need to split the amount between two bank accounts to retain the protection if you haven't managed to buy a house within six months. If you have nearly completed a house purchase by the time the six months are up, I wouldn't bother moving the money, but if you haven't found a house you want to buy, moving it is probably sensible. 

You should also keep any communication you have about the source of the money - if you buy a house, your solicitor will need to see evidence of where the money has come from.

Once you own a house you will find that it comes with certain repair obligations, so you may want to keep at least £6000 in cash after all the costs of buying and moving into the house are paid.

poppy12345

tacpot12 said:

You may benefit from knowing that if you deposit this large sum into your bank account it is protected for upto six months by the Financial Services Compensation Scheme, but after six months the amount protected drops to £85,000, so you may need to split the amount between two bank accounts to retain the protection if you haven't managed to buy a house within six months. If you have nearly completed a house purchase by the time the six months are up, I wouldn't bother moving the money, but if you haven't found a house you want to buy, moving it is probably sensible. 

You should also keep any communication you have about the source of the money - if you buy a house, your solicitor will need to see evidence of where the money has come from.

Once you own a house you will find that it comes with certain repair obligations, so you may want to keep at least £6000 in cash after all the costs of buying and moving into the house are paid.

Are you sure about that and do you have a link to confirm that? It's inheritance, not compensation.

Also money disregarded for house purchases are for those selling their home and buying another with the proceeds from the sale of the house.Money from an inheritance isn't disregarded even when buying a house with the money.

calcotti

poppy12345 said:

tacpot12 said:

You may benefit from knowing that if you deposit this large sum into your bank account it is protected for upto six months by the Financial Services Compensation Scheme, but after six months the amount protected drops to £85,000, so you may need to split the amount between two bank accounts to retain the protection if you haven't managed to buy a house within six months. If you have nearly completed a house purchase by the time the six months are up, I wouldn't bother moving the money, but if you haven't found a house you want to buy, moving it is probably sensible. 

You should also keep any communication you have about the source of the money - if you buy a house, your solicitor will need to see evidence of where the money has come from.

Once you own a house you will find that it comes with certain repair obligations, so you may want to keep at least £6000 in cash after all the costs of buying and moving into the house are paid.

Are you sure about that and do you have a link to confirm that? It's inheritance, not compensation.

Inheritance is listed as one of the sources that can be protected by temporary higher protection of up to £1million for six months
https://www.fscs.org.uk/how-we-work/claims-process/temporary-high-balances/

poppy12345

calcotti said:

poppy12345 said:

tacpot12 said:

You may benefit from knowing that if you deposit this large sum into your bank account it is protected for upto six months by the Financial Services Compensation Scheme, but after six months the amount protected drops to £85,000, so you may need to split the amount between two bank accounts to retain the protection if you haven't managed to buy a house within six months. If you have nearly completed a house purchase by the time the six months are up, I wouldn't bother moving the money, but if you haven't found a house you want to buy, moving it is probably sensible. 

You should also keep any communication you have about the source of the money - if you buy a house, your solicitor will need to see evidence of where the money has come from.

Once you own a house you will find that it comes with certain repair obligations, so you may want to keep at least £6000 in cash after all the costs of buying and moving into the house are paid.

Are you sure about that and do you have a link to confirm that? It's inheritance, not compensation.

Inheritance is listed as one of the sources that can be protected by temporary higher protection of up to £1million for six months
https://www.fscs.org.uk/how-we-work/claims-process/temporary-high-balances/

Wow, you learn something new everyday. So a person could receive a large life changing sum of money from the sources listed above and still continue to receive mean tested benefits?

elsien

The FSCS protection is nothing to do with benefits. It’s about the limits you will be covered for if a bank goes bust and applied to anyone with temporary large amounts of money in the given circumstances,  as per the link. 

Pok3mon

As soon as you receive the money you will have to pay for yourself. Only exception I believe is sale of own property if buying a new one.

born_again

tacpot12 said:

You may benefit from knowing that if you deposit this large sum into your bank account it is protected for upto six months by the Financial Services Compensation Scheme, but after six months the amount protected drops to £85,000, so you may need to split the amount between two bank accounts to retain the protection if you haven't managed to buy a house within six months. If you have nearly completed a house purchase by the time the six months are up, I wouldn't bother moving the money, but if you haven't found a house you want to buy, moving it is probably sensible. 

You should also keep any communication you have about the source of the money - if you buy a house, your solicitor will need to see evidence of where the money has come from.

Once you own a house you will find that it comes with certain repair obligations, so you may want to keep at least £6000 in cash after all the costs of buying and moving into the house are paid.

Just make sure if you do split the funds, that the banks are not part of the same group.
Ie First Direct & HSBC as that would still be counted as one bank (so only £85K cover). Due to sharing the same licence.

calcotti

poppy12345 said: Wow, you learn something new everyday. So a person could receive a large life changing sum of money from the sources listed above and still continue to receive mean tested benefits? 

No, this bit of advice was not about benefits, it was about whether money in the bank is safe if the bank goes bust.

calcotti

Pok3mon said:

..Only exception I believe is sale of own property if buying a new one.

That is not the only exception. However inheritance does not fall under any exemption which is the only issue relevant to OP’s question.