Inheritance on Benefits. Stressful and depressing.

Dr_Z

My wife is disabled (Lifelong disability)  We've been on and off benefits all our lives as her condition goes through good and bad periods,  but I think, sadly, now its gone past the point that I'll ever return to work, or more to the point, be able to leave her alone while I work.  (never, say never though,  just being realistic) 

We live in private rented accommodation, and have been on the council list for YEARS, but nothing has been given to us. 

We currently receive Higher rates of PIP (both components ESA, Carers allowance, Housing Benefit and Council tax benefit.   

If a year ago you had said to me "Would you like £150k?" I'd have had your arm off!  and I'd have guessed it would have greatly improved our quality of life. 

However, my mother passed away this year, and it looks like I'm about to inherit that amount. 

Firstly let me say, I absolutely wouldn't expect to keep any means test benefits!  And I'm certainly not looking for some kind of loophole to do so .... 

But the more I look into things, it feels like having this money will make our lives more difficult, than easier?  

It's not nearly enough to buy a house in this area (and we need to stay here for various reasons, and even if we did move further afield, after we've paid for the property, we'd have very little left, and would be needing to trouble the DWP for benefits again ... which is where I understand things can get problematic, as they'd consider us to have deprived ourselves of the money.  Even if that was the case, I'd be very worried about having bought a house and having no money for maintenance.  

So the alternative is to simply live off the money?  Absolutely fair, I get the logic in that, and I totally agree that someone with £150k in their pocket should be paying their own way!   But the part that scares me is that inevitably this money will run down on rent and cost of living, and we'll end up needing benefits again. (pretty sure this would be 10 years, max? Rent and Council tax are currently £15,000 per year alone  and these number only seem ever go up! )

As I understand it, at this point they'll be very judgemental about what we spent the money on? and if they deem we've spent it on unnecessary stuff, we'll be left out in the cold? 

So we go from where we are now. scraping to get by, but being allowed to spend what we have on what we can afford ... if we've budgeted well, maybe a little holiday, or a new TV? Presents for the kids etc ...

   To having this money in the bank that we are scared to touch in case the DWP disapprove? 

It just seems insane that my Mother left us this money hoping it would help us out,  and it feels like it's going to do the opposite.  

I know being homeless isn't exactly convenient for anyone, but with my wife's disability she REALLY can't live on the street, it's simply not an option, it would kill her. I simply can't risk that ending up happening because they decide we spent the money too fast. 

tacpot12

It would also be my initial reaction that this inheritance would make things more difficult rather than easier for you, but you need to be aware that you are only just starting to come to terms with how life will be different with this inheritance. You aren't used to having this much money, and looking after it and spending it wisely will be daunting. It's a shock to the system, especially as you will still be greiving for your mother. You have done the right thing coming here to the forum for advice and reassurance. 

They are not going to decide that you have spent the money too fast if you spend it at the same sort of rate you were receiving benefits. Even the DWP don't consider the benefits they pay you as generous, so spending at the same rate you do now (and increasing this in line with inflation) will be fine.

You can also plan on spending a bit more. It would be wise to keep receipts for big purchases, and not to spend the money on extravagant purchases. You should also plan on becoming more careful with your spending as your capital reduces towards the £16,000 limit at which you will be able to claim means-tested benefits. 

Rubyroobs

I think it's acceptable to use it to purchase property or a share of property so something like shared ownership could work ? seek expert advice before commiting though.

Dr_Z

Thanks, yes I did consider shared ownership,  but my worry is that we end up pretty much in the same position as we are now renting, (i.e. with Housing benefits paying the rent/service charge)  ...and the added responsibility of maintenance costs on the property?  

Inevitably we'd end up with the £6k maximum in savings, would that be enough for any likely maintenance, and if not, what then?  I understand the if that happens the other partner in the shared ownership can repossess the property? 

I appreciate the points in the first post,   but if we can't spend a little of the money on something a little extravagant (and I'm not talking about a speedboat, or a flash car, or pointless jewellery)  then, what's the point?  

Sorry if that comes across as entitled, but we haven't had a holiday in 7 years, as not only can we not afford it, but they are logistical nightmares (accessibility etc) , if we started going on annual holidays (in the UK, Im not talking about world cruises or anything) would this be deemed extravagant?

It just seems like so much to worry about,  I don't mean to make it sound dark, but my Mothers will says if I haven't survived her, my share would go to my son.  I'm starting to think that would be easier,  but my wife needs me, so not even that would work. 

turnemc

I wonder if you could get the executor of your mums will to do a deed of variation to give the inheritance directly to your son. Then it’d never touch your bank account and upset your current setup. He could then occasionally treat you from his windfall ?!

Torry_Quine

turnemc said:

I wonder if you could get the executor of your mums will to do a deed of variation to give the inheritance directly to your son. Then it’d never touch your bank account and upset your current setup. He could then occasionally treat you from his windfall ?!

No that would be regarded as deprivation of assets. 

Keep_pedalling

You are not going to be accused of deprivation of assets for taking an annual holiday or treating yourselves to the odd luxury. As long as you are not going to be claiming MT benefits again for say 6-10 years no one is going to do a forensic examination of your spending over that long period of time. 

HillStreetBlues

Agree with Keep_pedalling
An  inheritance is expected to be used for daily living and the extras that make life more bearable like holidays.

Spoonie_Turtle

I mean, there's a spectrum of holidays even in the UK.  £400 cramped caravan in the middle of nowhere, that's frugal and while it works fine for various families, it most certainly does not work for all.

£12,000 to hire an entire grand property by yourselves for a week or two in the summer, that would be extravagant.

Going somewhere that meets accessibility needs and your family's needs during the school holiday (if your son is school age) is going to cost what it costs.  There is a price range depending on where and in what kind of place you want to stay - although caravans can cost just as much as cottages - but generally there's a minimum for somewhere that meets people's various needs and preferences, then throw in accessibility needs and the price goes up. 

And realistically you're not likely to want to pay more than you need to for a holiday you'll enjoy, because you need that money to live off, right?  So please don't be too scared to have a nice, comfortable holiday, especially as you haven't had one for years.

And the same goes for if anything in the house needs replacing, new appliances or furnishings.  As long as you don't go for top-of-the-range or bespoke stuff unnecessarily, you also don't have to go for bottom of the budget stuff that won't last.  Something reasonable, in between.

I'm sorry for your loss, and I'm sorry that you have to deal with worrying about this money.  But I hope you do feel able to use it to live somewhat comfortably, perhaps more comfortably than you have done in recent years.

elsien

 I think you’re overthinking it. The DWP are not going to be scrutinising every penny that you spend and are not going to be expecting you to go for the cheapest possible option with every purchase that you make. Reasonable  expenditure is expected. 
Living a normal life, doing things that people do like going on holidays that work for you and having meals out, buying things that make life more comfortable for your wife, paying off debt, not a problem. 

Blowing the lot in six months on a round the world cruise, Michelin starred restaurants and some very expensive wine, definitely a problem. 

Use it to have a better quality of life than you have now and make some good memories.  Just don’t go completely mad.

Keep_pedalling

One other point, as you are going to be living off this money for a considerable time make sure you maximise the amount interest you earn on it. I would put your first years requirement in an instant access account, a similar amount in a 1 year fixed term bond and the rest in longer fixed term bonds.

No need to use ISAs as with the low income the two of you are on you can take advantage of the starting savings rate which combined with your personal savings allowance means that each of you can earn up to £6000 of interest tax free.