- September 24, 2023
- Posted by: legaleseblogger
- Category: Related News
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Looking for high-level advice for my mum
Current situation:
My mum is currently receiving £1158 per month from Universal Credit (UC) and £106 monthly from Personal Independence Payment (PIP). She is also about to receive a divorce settlement amounting to £62k.
Financial status:
My mum doesn’t have any mortgage or unsecured debts, and she is currently renting.
Potential concerns:
After receiving the lump sum, I am concerned that her benefits might stop. Moreover, the amount she will receive may not be sufficient for her to purchase a property on her own, and investing it might leave her without a regular monthly income. This leaves me unsure about the best recommendation I can provide to her.
Benefits and the AI Legalese Decoder:
In this situation, the AI Legalese Decoder can play a crucial role in helping my mum understand the nuances of the legal jargon associated with her benefits and financial situation. It can decode and simplify complex legal language, ensuring that she fully comprehends her rights and entitlements.
Additionally, the AI Legalese Decoder can assist her in navigating possible changes to her benefits after receiving the lump sum. By providing clear and concise explanations, it can help her understand any potential risks or alterations to her current benefit status. This understanding will enable her to make well-informed decisions about her financial future.
General advice and recommendations:
Considering my mum’s circumstances, here are some general suggestions on what she could do with the lump sum:
1. Seek professional financial advice: It would be wise for my mum to consult a financial advisor who can assess her situation and provide personalized recommendations based on her needs and goals. They can help her create a comprehensive financial plan, considering various factors such as her age, lifestyle, and long-term objectives.
2. Explore affordable housing options: Since purchasing a property outright might not be feasible, she could consider alternative housing options such as shared ownership schemes or affordable housing initiatives. These options can provide her with an opportunity to get on the property ladder without straining her financial resources.
3. Consider investment opportunities: Although investing the lump sum may lead to a loss of monthly income, it could potentially generate long-term returns. My mum should consult with a financial advisor who can guide her in selecting suitable investment options based on her risk tolerance and financial goals.
4. Review her overall financial picture: It is crucial for my mum to assess her entire financial situation holistically. This includes reviewing her budget, exploring potential ways to increase her income, and examining any potential eligibility for additional benefits or grants.
In conclusion, the AI Legalese Decoder can aid my mum in understanding the legal language surrounding her benefits, thereby empowering her to make informed choices. Additionally, seeking professional advice and considering various housing and investment options can help her make the most of the lump sum while maintaining a sustainable financial future.
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****** just grabbed a
ThereÔÇÖs nothing she can do except live off it until sheÔÇÖs under the 16k again . If she invests it / spends it in order to stay on benefits it will be seen as deprivation of capital
However the PIP wonÔÇÖt stop as itÔÇÖs not means tested lovely it will only be the Uc
Her universal credit will indeed stop; her PIP will not, as that’s not means tested at all.
Realistically, she’s going to need to use the money to live on. If her spending stays the same, in she’ll become eligible for universal credit again in just over 3 years’ time (when her savings fall below ┬ú16k). She could also put a bit (┬ú2880/year) into a pension.
Is buying a property seen as deprivation of capital?
Nothing you can do. Pip isn’t means tested so it won’t be affected. The universal credit will stop, make sure she reports it via her journal.
Anything done to try and get around this is deprivation of capital and the full amount will still be taken into account, even if you hypothetically spent every last penny overnight. Benefits like UC are to help those in financial need, someone with access to ┬ú62k cash isn’t in need of financial benefits anymore.
To save herself loads of time she may as well just ask them to close her claim. That will be the outcome anyway, she will just cut out all the questions and appointments they may ask her to attend to then close it anyway.
CanÔÇÖt she get a job to make up for the loss of UC? It would be good to invest the ┬ú62,000 and not just live off it.
PIP will continue, UC will stop until she is back under 16k. She should live off the £62k and not spend it outside of her means, until she is left with less than 16k, and then claim UC again.
Any other suggestion, would likely be illegal.
Guessing she wouldn’t consider moving to an area where she could buy a property with that?
Would putting into a pension be an option ? Would that mean.it exempt ?
Is your mum still in good relations with her ex? Can her ex afford the settlement? Would him finding the £62k leave him in financial hardship?
If so they could arrange a payment plan through a solicitor. So he could give her say £5000 upfront and then £500 a month for 120 months (which includes a little extra to cover lost interest).
Then all your mum needs to do is spend £500 a month for the next 10 years making sure she stays under the £6k limit.
Obviously get professional advice on this.
She is losing the UC element. Save the money in a 5% fixed savings account and she’ll earn enough interest to more than compensate for the loss in UC income.
I think nS&I are paying 6% at the moment.
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Hi /u/ChuckCassadyJR, based on your post the following pages from our wiki may be relevant:
– https://ukpersonal.finance/lump-sum/
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PIP is not means tested so that shouldn’t be affected. Pretty sure the UC would be cut off though once she informs them, as it is over the ┬ú16,000 capital limit allowed.
She’ll be able to earn a fair bit in interest if she keeps most of it in a high interest savings account. I think she’ll essentially have to live on that until she dips back below the universal credit limit from what you have said.
She has to tell the DWP as soon as she gets it, she wouldn’t get a mortgage. There might be a shared ownership option but she has to be incredibly careful about deprivation of assests because benefit fraud can lead to prison (for her and anyone who helps her hide money). /r/DWPhelp /r/BenefitsAdviceUK
Either spend the money, or get a job so she doesn’t have to claim benefits, she can save more or spend the money at a slower rate
Her universal credit will stop due to the level of savings and she will be expected to support herself with the money she will also likely need to keep a track of how she spends the money.
When it runs out if she wants to apply for Uc again they will question the use of the funds and could consider it deprivation of capital if she has ÔÇÿmisspentÔÇÖ it in their eyes.
She can use the money to pay off debt without it been seen as a deprivation of capital.
If she did put a deposit down for a house she needs to consider how to afford it long term.
She wonÔÇÖt get any housing element in her UC as there is no rent to pay
She may be able to buy a shared ownership property with benefits income. It’s worth speaking to a mortgage broker.
Does the divorce settlement include the sale of the marital home? If so, possibly the money could be disregarded as savings for six months if she intends to use it to buy a property. She would have to declare it, provide evidence of the house sale, and then it’s up to the work coach to decide whether it’s disregarded or not.
It amazes me to see people getting life changing money, and instead of wanting to live of it, they want to hide it away and still claim benefits.
If she gifted the amount to you, would it be seems as deprivation of capital?
The other option is for her to get a job / create an income source so she can invest this money of put it in a pension.
She needs to report the change and let the DWP decide if there are any disregards on the Capital she is receiving. Likeliest outcome is closure of UC claim. However, she might be entitled to non-means tested benefits like ESA or JSA depending on her National Insurance record.