Financial advice: lump sum inheritance whilst on Universal Credit

Unicorn79

Hi there

I am a single parent and work part time whilst on Universal Credit.  I am due to receive £25k inheritance and wondering if I could put this directly into my shared ownership house (part own, part rent for which UC helps with the rent).  Or into a pension (I only started putting in money for a pension 18 months ago and am my mid 40's).

I have worked hard to manage bills of where I am now and worried I will lose my claim which I have taken a while to set up after the break up and set up work and small income flow enough to get us by.

If I put the money in the SO house, this will lower the rent.  Or if I put into a pension, this will help me when I retire as I have not paid into a pension before.

Help really appreciated.

kaMelo

You can't pay more than you've earned into a pension scheme each year so your earnings will dictate how much that can be. 

I don't see any problem in buying more of a share of the home you live in however there may be a period between receiving the inheritance and purchasing that share where your capital may affect how much UC you qualify for.

As a side note to your quote about not paying into a pension before, are you not in your employers pension scheme?

If not, why?

poppy12345

Paying off a mortgage or buying more of a share of your home will not be treated as deprivation of capital. Though i agree with kaMelo that buying more of a share isn't something that would likely be done overnight. For UC what counts is what savings you have on the last day of your assessment period so if this can be done before this then it would be fine. Otherwise your UC will end.

Unicorn79

Thank you kaMelo.

I am self-employed so pay into my pension what I can afford each month dependant on earnings so it's really flexible.  There is an option at the end of the year to pay in a lump sum before April, which I have never done.  The governement top up the pension by 25% for sole traders.

When I was employed years ago, I never paid into the work pension, I was advised against a pension by family so followed their advice at the time.  Now facing the consequences!

Unicorn79

Thank you poppy12345.

Can the inheritance be help by the executers until I have set up the share, or does it come straight to me regardless?

Brie

Don't you have to report such a payment to DWP who will reduce your UC?  I don't know if there's any way to get the executors to pay it directly to your mortgage rather than you to avoid this.

Unicorn79

Thanks Brie.

I am not in the position yet thankfully.  I would only like the funds, once I'm ready to move it.  Otherwise it will just be spent on rent and I am back to square 1 in a year or so.

HillStreetBlues

Unicorn79 said:

Thanks Brie.

I am not in the position yet thankfully.  I would only like the funds, once I'm ready to move it.  Otherwise it will just be spent on rent and I am back to square 1 in a year or so.

The executor needs to pay any inheritance when it's due, they shouldn't hold onto it.

Newcad

In certain circumstances money that is intended to purchase premises that the claimant intends to occupy as their home can be disregarded as capital for UC for 6 months.

(There a similar clause about money intended to improve the home, is buying more share an 'improvement?)

I'm not entirely sure in this case of a shared ownership where you already occupy, but it does seem a possibility and if agreed that would allow you a bit more time to deal with the shared ownership paperwork.

You may be as well enquiring about it on your journal, I'd put it under Service Issues, the worst they can do is say that it won't be disregarded which leaves you in the same situation as now.
At best you'll get confirmation that it can/will be disregarded until you can use it on buying more of the share of your home.

Of course if you do get the money in your account then you should tell them about it and what you intend to do with it.

HillStreetBlues

Newcad said:

In certain circumstances money that is intended to purchase premises that the claimant intends to occupy as their home can be disregarded as capital for UC for 6 months.

It wouldn't apply to a simple lump sum inheritance,  for it to be disregarded  it would have to be
1 is attributable to the proceeds of the sale of premises formerly occupied as their home or
2. has been deposited with a housing association (see H2045) or
3. is a grant made to the person for the sole purpose of purchasing a home

Newcad

Agreed that is what the 'standard' oft quoted situation is, which is why I am not sure.
There are often less quoted, non-standard, provisions as well.

I would be surprised if there isn't something burried in the ADM about such shared ownership schemes, (but I'm not up to trawling the labyrinth that is the ADM at the moment).

But I don't see any harm in asking on the journal, as said if they refuse then the situation hasn't changed.