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By Jasmine Birtles, financial expert from Moneymagpie.com
There’s free money to be had when you have a baby and start to run a family. It’s just as well because you need all the bargains, cut-price deals, cheap offers and other financial help with the cost of bringing up children. Here are tips on how to have a great family life on half your salary.
The first thing to go for when you’re strapped for cash and running a family is to make the most of any benefits available to you.
£190 Health in Pregnancy grant (HiP)
This is a lovely one-off payment of £190 that goes to any pregnant woman who is at least 25 weeks pregnant. The idea of it is that you use the money to buy healthy food to keep yourself strong during pregnancy but you can spend it on other things if you prefer. In order to get it you also need to have been given health advice from a midwife or doctor to help you and your unborn baby stay healthy during pregnancy.
Usually pregnant women find out about it through their midwife, but if you haven’t heard about it yet you can get information from Direct.gov.uk [http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Expectingorbringingupchildren/HealthinPregnancyGrant/DG_173502] including how to get a claim form if your midwife or doctor hasn’t already given you one.
£500 Sure Start maternity grant
If you are receiving income-related benefits or tax credits you will qualify for a maternity grant worth £500. This one-off payment is yours to keep, so you won’t have to pay it back. It is designed to help you buy all the items needed for your new baby.
You can apply for a Sure Start Maternity Grant by completing claim pack SF100 (Sure Start). To get a claim pack, contact Jobcentre Plus or you can download a copy from the Department of Work and Pensions website [http://www.dwp.gov.uk/]. You can apply from 11 weeks before the week the baby is due until three months after the birth. You should return your completed claim pack to Jobcentre Plus.
£20 per week in Child Benefit
Next there’s making sure you are set up and ready to claim your Child Benefit, which is worth £20.00 per week for your first child and £13.20 for each younger child. You will get Child Benefit if you are responsible for a child, and satisfy certain other criteria.
Child Benefit can be paid into any bank, building society, or National Savings & Investments (NS&I) account that accepts Direct Payment. It’s usually paid every four weeks, but it can be paid weekly if you are getting Income Support, Income-based Jobseeker’s Allowance, income related Employment and Support Allowance or if you are a single parent.
Remember that even if you don’t need this cash bonus each week, you could use it to invest for your children. In fact it would be a great thing to add to their Child Trust Fund.
Check it all out at your local benefits office or find out more on the HMRC website here [http://www.hmrc.gov.uk/childbenefit/index.htm].
£2,845 a year in Child Tax Credit
You should also see if you’re entitled to child tax credits [http://www.hmrc.gov.uk/taxcredits/keep-up-to-date/changes-affect/family-change/new-baby.htm]. These depend on your annual income and are composed of two parts:
- The first is the ‘family element’, worth up to £545 per year and is paid to any family with at least one child.
- The other is the ‘child element’, worth up to £2,235 in this tax year and £2,300 from April 2010, which is paid to each child in the family.
See the rates and allowances here [http://www.hmrc.gov.uk/rates/taxcredits.htm]. If you have a child under one, you will get a little extra (the ‘baby element’) which stops once the child reaches one year old.
The good thing is that you don’t need to have a very low income to get some help so there’s a very good chance you’ll get something. Do claim as soon as you are able to because amounts can only be backdated for up to three months. Payments will go directly into your account. If you need more help you can call the Tax Credit Helpline on 0845 300 3900.
National Insurance credits
Don’t forget that while you are off work to look after your little one you will get National Insurance Credits [http://www.hmrc.gov.uk/ni/intro/credits.htm] which will count towards your State Pension. From this April you will only need 30 years of National Insurance credits to qualify for the full State Pension.
Child trust funds
A Child Trust Fund (CTF) is a savings and investment account for children. You can claim on for each child born on or after 1 September 2002 and will receive a £250 voucher to start their account.
The account belongs to the child and can't be touched until they turn 18, so that children have some money behind them to start their adult life. For information visit http://www.childtrustfund.gov.uk/.
Other benefits
Unfortunately, Britain’s benefits system can be quite complicated – so much so that many people are unaware of some of the benefits they are legally entitled to. In fact, more than £8 billion-worth of benefits and tax credits go unclaimed each year. Help is at hand though, in the form of Entitledto.co.uk.
This government website automatically works out whether you’re eligible for any benefits. All you have to do is enter some details (such as how much you earn, your council tax rate, any savings you have) and see what you could be due.
