A Personal Injury Trust is generally set up to prevent your personal injury compensation affecting your entitlement to means tested state benefits or to protect you against the settlement being used in the wrong way, either due to pressure from other people or through your own behaviour.

The money in the Personal Injury Trust can still be used for your benefit (and would normally be treated as belonging to you for all tax purposes) but if the Trust is for benefit protection purposes, it cannot be used for regular expenses that your benefits are meant to cover (such as Council Tax, gas, water, electricity etc.). The Trust can, however, be used for all non-regular expenses, such as holidays, cars, houses, clothing, etc.