Receiving a compensation payout after an accident or injury can be life-changing. It may provide financial security, help with care costs, and support your long-term recovery. But many people don’t realise that without the right planning, a compensation award could affect entitlement to means-tested benefits.

That’s where a Personal Injury Trust comes in. At Pryers Solicitors, we help clients set up trusts to ensure their settlement is fully protected. Here’s why a Personal Injury Trust could be the right choice for you.

What is a Personal Injury Trust?

A Personal Injury Trust is a legal arrangement where your compensation is placed into a trust account, managed by trustees. These trustees (who could be family members, friends, or professionals such as solicitors) look after the money and ensure it is used for your benefit.

The trust ring-fences your compensation, keeping it separate from your personal savings and income.

Why should you set up a Personal Injury Trust?

1. Protects Your Means-Tested Benefits

Without a trust, your compensation payout could be counted as savings when applying for or continuing to claim benefits such as:

• Universal Credit
• Housing Benefit
• Council Tax Reduction
• Income-related ESA or JSA

If your total savings go above certain thresholds (currently £6,000 or £16,000), you may lose some or all of your benefits. A Personal Injury Trust ensures the compensation is ignored in these assessments.

2. Keeps Your Compensation Safe

A trust provides structure and oversight. With trustees involved, your money is less at risk of being misspent or accessed in ways that aren’t in your best interests.

3. Flexibility in Managing Funds

Trustees can release money when you need it – for example, to pay for specialist care, home adaptations, mobility aids, or other expenses that improve your quality of life.

4. Peace of Mind for the Future

A trust ensures your compensation is safeguarded long-term. If your circumstances change, or you need ongoing support, the money will still be available for your needs.

5. Professional Support Where Needed

If you appoint a professional trustee, such as a solicitor, you benefit from expert financial management and legal compliance – particularly helpful for larger or more complex awards.

How do you set up a Personal Injury Trust?

The process involves:

1. Choosing trustees – usually at least two people, who you trust to manage your money.
2. Drafting a trust deed – a legal document that sets out how the trust works.
3. Opening a trust account – a separate bank account for the compensation money.
4. Transferring your compensation – once the money is in the trust, it’s protected.

It’s important to set up the trust before you receive your compensation , or within 52 weeks of the payout, to ensure your benefits remain protected.

Do you need a solicitor?

While it’s possible to set up a trust without legal advice, mistakes can be costly. At Pryers Solicitors, we:

• Draft legally sound trust deeds.
• Help you choose suitable trustees.
• Act as professional trustees if required.
• Provide clear advice on how to manage the trust going forward.

How Pryers Solicitors can help

At Pryers, our solicitors understand the emotional toll caring for someone else’s finances takes, and the number of responsibilities already on your shoulders as you help them navigate their new reality. We’re here to listen and understand your situation and get to know your loved one so we can make sure they’re financially supported to enjoy their life without worry. We’ll work with you to make the best decisions for them and their care to let them enjoy an unrestricted life. 

We’re committed to supporting you in setting up the best trust that will offer the most value for their person it is set up to help. We’ve been setting up and managing PI trusts for many years and can draw on our wealth of experience to create the perfect trust for you or your loved one. If you need support and advice to set up a personal injury trust, contact our team today by emailing help@pryers.co.uk or fill out the form below.