If your personal injury compensation is more than £6,000 and you are in receipt of means tested state benefits and/or local authority support, you could lose some of your benefits.
You can protect your benefits by setting up a Personal Injury Trust, sometimes known as a Special Needs Trust or a Compensation Protection Trust.
Even if you are not claiming benefits at the moment, a Personal Injury Trust will give you protection against future benefit claims, providing that you set it up at the same time as you receive your compensation.
Depending on the type of injury, compensation awards can involve substantial amounts of money. Therefore, a trust can be helpful for anyone that is incapable of managing their financial affairs, the elderly, or for anyone who might not be used to handling large sums of money.
An additional benefit is that if your compensation is placed in a trust and you need help with care in the future, the local authority cannot include it when they assess your contribution to the cost of care.
You can find more information in our factsheet – Guide to Personal Injury Trusts.