They say parents know best, but do they actually? Considering over £800m went unclaimed in child benefits last year, it’s probably fair to say not all parents are on top of their finances.
If you’re a new parent or expecting, here are 5 things that you should be aware of to help you make smarter decisions about your family & children’s financial future. Some are things you may be entitled to while others are ways of using your own money to help your children in the future.
15/30 hours free childcare
Investing for your child’s future
If you already know everything about these things then maybe this article is not for you, although it’s cool to skim through it and give yourself a 5 out of 5 - otherwise, keep on reading and by the end of it you’ll have an understanding of the basics required to secure your family finances.
What you may be entitled to
Simply put, this is money that the government pays to the parents or legal guardians responsible for raising a child.
You're eligible for the full allowance (~£84 per month) of child benefits if:
You're responsible for a child under 16 years old (20 if still in full-time education or training)
You and your partner earn less than £50k per year each (if the person on the highest income earns more than £50k but less than £60k you'll still be eligible for some)
If this is you, apply here.
Potential benefit: £1,099 (per year) for the first child and £728 for each additional child (based on 2021/22 allowances)
This is a government help that covers up to a 20% saving on your bill. That is, for every £8 you pay, the government contributes another £2. So if your monthly childcare invoice is £500, you only pay £400 out of pocket and the remaining £100 comes from the government contribution ie. you save £100.
You can receive contributions of up to £500 every three months, so a total of £2,000 per year. Children with disabilities get more, respectively up to £1,000 every three months or £4,000 a year.
Not all parents can claim it though. You're eligible for tax-free childcare if:
You're working, on shared paternal, maternity, paternity or adoption leave
You and your partner (if you have one) are expected to earn at least the National Minimum Wage or Living wage for 16 hours a week over the next 3 months