Money With Kids

A guide to help ensure those with children are taking advantage of all the financial assistance available and making the most of their money.

There are no two ways about it - kids are expensive! From nappies, to clothes, to food to fill their seemingly endless tummies; introducing a child into your life will change your finances forever.

Whilst every parent is aware of this and would sacrifice their own needs to ensure that their children are taken care of, healthy and happy - there are still bills to pay and other essential costs that need to be met. If income is tight, then a child can really put a strain on household finances.

But there is financial assistance out there, benefits and grants that can be taken advantage of, and other tips and tricks to help make your money go further. On this page, we aim to surface as many of these as possible, as well as making it as simple to understand as possible, to help you maximise your money with kids.

Contents (click to jump straight to the relevant section)

• Finance in Maternity
• Child Benefit
• Childcare
• Support for School Age Children
• Savings and Investments
• Support for Students with Children
• Other Financial Assistance

Finance in Maternity

First up, if this baby is your first - or if you already have children but are expecting twins or triplets or more AND you or your partner are receiving benefits - you can claim a grant of £500 through Sure Start. To apply, you need to just fill out a form and have a midwife or doctor also sign it. Click here to find the form and read some additional details.

When it comes to maternity leave and maternity pay, if you are employed, you are entitled to take time off work when you have a baby. Statutory Maternity Leave (SML) last for a maximum of 52 weeks and is made up of 26 weeks of 'Ordinary Maternity Leave' and 26 weeks of 'Additional Maternity Leave'. You do not have to take all 52 weeks off work, you can choose how long to take off - however you must take 2 weeks off after giving birth (or 4 weeks if you work in a factory). This time off is important to give you time to bond with your child and care for him/her, as well as giving your body time to recover from childbirth. It doesn't matter how long you have been employed with your company or how many hours you work - you are still entitled to take this leave, provided you give your employer the correct amount of notice (at least 15 weeks before your due date).

Additionally, you may be entitled to be paid during this time off. This pay is known as Statutory Maternity Pay (SMP). Unlike Statutory Maternity Leave discussed above, you need to qualify for SMP. The criteria to qualify are:

• You must have continuously worked in your job for at least 26 weeks leading up to the 15th week before your due date. This is a little confusing, but in essence it means, you need to have started your job at least 41 weeks before your due date. For example, if your due date were December 31st, then this would mean you must have started your job on March 28th.
• You must earn at least £120 per week on average.
• Give your employer notice that you will be taking maternity leave, at least 15 weeks before your due date.

How much pay you will receive will depend on your earnings. You will earn 90% of your average weekly pre-tax earnings for the first 6 weeks of your maternity leave. You will then receive £151.20 or 90% of your average weekly earnings - depending on which figure is lower - for the next 33 weeks. After this time, you will receive no financial assistance. You should note that tax and national insurance will still be deducted from your maternity payments. As an example, if you earn £24,960 per annum before tax (or £480 per week) then over the course of the full 52 weeks maternity leave you could expect to receive (approximately):

• 6 weeks' pay of £432
• 33 weeks' pay of £151.20
• 13 weeks with no pay

It is also worth noting that your employer may offer additional maternity payments as a benefit or perk of the job. However, they do not have to do this.

If you do not qualify for SMP, then you may instead be able to claim maternity allowance. This is a payment that can be received for up to 39 weeks. The amount you will receive will depend on your eligibility. It is recommended you check how much you will be eligible to receive using the link shown below.

Useful links:
- The Sure Start maternity grant
- Government maternity leave and pay calculator
- Maternity allowance details

Child Benefit

If you have a child under the age of 16 (or under the age of 20 if they are undertaking certain education or training) then you can claim child benefit. This is a payment made into your account each 4 weeks. You can spend this money on whatever you like (although the intention is that parents use the money to help with the cost of clothes, food, toys and things that will directly benefit the child).

The amount of child benefit you will receive varies depending on the number of children you have. For your eldest child you will receive £21.05 per week - or £84.20 in total for each four-weekly payment.

For each subsequent child, you will receive £13.95 per week, per child - or £55.80 per each four-weekly payment.

A couple of illustrations are provided below:

There are a few things you should be aware of regarding child benefit and your eligibility. Firstly, only one person can claim for each child. So even if parents were separated, only one would receive the child benefit payment.

Secondly, if either you or your partner earns over £50,000 then you will need to pay tax on your child benefit payments. And if you earn over £60,000 then the tax you pay will exceed the payment received making it not worthwhile to claim.

One little bonus of claiming child benefit, is that the 'claimer' will earn National Insurance credits towards their state pension if they are not working or are working but earn less than £166 per week. You should be mindful of this when deciding which parent will be claiming the benefit.

Useful links:
- Claim child benefit through the government site
- Child benefit tax calculator

Childcare

There are a number of schemes in which you can get assistance paying for childcare. This may be extremely beneficial in allowing parents to get back into work and start earning again.

The amount of free childcare hours you may be able to claim depends on where in the UK you live, your personal financial circumstances and the age of your child/children.

You may be able to receive free childcare for your two-year-old - typically 15 hours per week - provided you receive one of the following benefits:

• Income Support
• Jobseeker’s Allowance
• Employment and Support Allowance
• Universal Credit and your household income is £15,400 a year or less after tax
• tax credits, and your household income is £16,190 a year or less before tax
• the guaranteed element of Pension Credit

This would need to be applied for via your local council. Click here to find your local authority website.

All 3 and 4 year olds in the UK are eligible for free childcare. In England this is 30 hours per week, but it may be 15 hours per week in other parts of the UK. This free childcare is available until your child starts school. You can check your eligibility and apply online - click here to get started.

There are certain conditions surrounding where you may use your free childcare. You couldn't, for example, use the hours to pay a grandparent for looking after your child, unless they were a registered childminder. The childcare must be provided by:

• a registered childminder, nanny, playscheme, nursery or club
• a childminder or nanny with a registered childminder agency or childcare agency
• a registered school
• a home care worker working for a registered home care agency

Useful links:
- Find out if you qualify on the government website

Support for School Age Children

Once your child starts school, there are a number of financial benefits that they you may be able to start claiming, such as assistance with the cost of transport to school, the cost of uniforms and school meals. Find out more about each of these and how to claim below.

You may be entitled to receive free transport to school. If your child goes to the nearest suitable school, and that school is:

• More than 2 miles away and the child is under 8
• More than 3 miles away and the child is 8 or older

Then that child is entitled to free school transport. This transport is provided by your local authority - you should check the government website here to ascertain if your child is eligible and for details on how to start your application.

Additionally, if the walking route to your child's school is unsafe, you may be able to get free transport - regardless of the distance. If you think that the walking route is not safe, then you should get in touch with your local council using the link above.

Lastly, if your child has mobility issues or is disabled, then you should be able to get free school transport regardless of the distance to the school. In this case, you can start your application for free transport here.

Some local authorities offer assistance with the cost of school uniforms and P.E. kit. If you are struggling with the cost of this uniform, then you should get in touch with your local council to see if they provide this financial assistance and if you can claim. You can do this using this link.

If your local council does not offer assistance and you are still struggling with the cost of uniform, then you should not hesitate to speak to your school directly and in confidence about this. Many schools have funds set aside to assist with the cost of uniform for parents who require it.

There are free school meals available to qualifying children in the UK, to ensure children are well fed and able to concentrate and succeed whilst studying in school.

Firstly, all children in government funded schools, in reception, year one and year two, are entitled to free school meals.

Additionally, you may be able to receive free school meals for your child if you receive one of the following forms of benefit:

• Income Support
• Jobseeker’s Allowance
• Employment and Support Allowance
• support under Part VI of the Immigration and Asylum Act 1999
• the guaranteed part of Pension Credit
• Child Tax Credit
• Working Tax Credit run-on
• Universal Credit with a household income less than £7,400 a year

Useful links:
- More information on free school transport
- More information on help with school uniform costs
- More information and apply for free school meals

Savings and Investments

If you wish to save money to help your children in the future; for instance for help to buy them their first car, fund their university education, or help them get on the property ladder - then there are some options that may make saving more favourable.

Junior ISAs are a saving account that you can take out for your child, that will ensure tax is not charge on any interest earned. As with adult ISAs, there are two types of junior ISA - a cash ISA and a stocks and shares ISA.

Regardless of which account you choose for your child (and you can actually choose one of each if you wish) you can add a total of £9,000 each year. While the parent opens the account and adds money to it, the money belongs to the child, and they may not withdraw it from the account until they turn 18.

Junior ISAs are offered by most of the high street banks and building societies. To find the right account for you and to get started with opening one, a simple Google search is probably your best first port of call.

Separately to Junior ISAs, there are bank and building society accounts especially aimed at children. And it is worth knowing, that there is usually no tax on interest earned from children's accounts - UNLESS - this interest exceeds £100 per year and the money was donated by a parent.

In this scenario, the parent would have to declare this on their tax return and would be charged tax on that money. Interestingly, this £100 limit does not apply if the money was donated by friends, grandparents, or other relatives - only parents - so all very confusing...

Useful links:
- Full details on Junior ISAs
- Top children's savings accounts at Money Saving Expert

Support for Students with Children

If you are a full-time student with one or more children, then you may be able to receive financial assistance to help you with your learning costs. This is called the Parents' Learning Allowance.

This payment is an additional amount that you can receive on top of any other student finance and is a grant rather than a loan, meaning you do not have to pay a penny of it back. The amount that you could receive depends on how much your household income is at the time of applying.

The maximum amount you could receive is £1,766 and the minimum is £50 (per annum). The money is paid in three instalments - one at the start of each term.

To qualify, you need to be taking a full-time undergraduate course or an initial teacher training course. You can apply for the Parents' Learning Allowance at the same time you apply for your student finance. See this page for more details or to start your application.

Other Financial Assistance

The below details other assistance that does not fit into any of the above categories:

If you have a child under 4 or are pregnant, you may be able to claim vouchers to pay for fresh fruit and vegetables, milk (including formula) and vitamins. The aim is to ensure that young children get a healthy start in life, regardless of their parents' current financial circumstances.

Eligibility is limited to those receiving certain benefits, or any parent under 18, regardless of their income.

For full details and to apply, check out the Healthy Start NHS website here.