advice

managing your finances as a family:
babies, benefits, and budgeting

With another little family member to care for, many of us feel the pinch during early parenthood. Less time spent working means a reduced income – just as you have another little mouth to feed. But babies needn’t be expensive, and there’s always financial support available to lend a hand. Here are our tips on managing your finances now you’re a family.

state benefits for families

claiming child benefit

All families are entitled to claim child benefit. Currently, the eldest or only child receives £20.70 per week, and additional children get an allowance of £13.70 per child.

Only one parent can register to claim child benefit; however, both your incomes are taken into account, and you may need to pay a tax charge if one of you earns over £50k. You may decide not to claim, but you’ll still need to complete the claim form, as it goes towards your own National Insurance credits, and ensures your child is registered to get their own NI number in 16 years time.

working tax credits for childcare

Many families are entitled to the 'Childcare Element of Working Tax Credit', and simply don’t realise that this is the case. If your total household income is below £46k a year, you may be eligible for help with childcare costs. Contact the tax credit helpline on 0345 300 3900 to find out more.

You may also be able to receive childcare vouchers through your employer. These pay for childcare from your pre-tax and pre-national insurance income. Speak with your HR department to find out more.

You may not be there yet, but it's good to think ahead and know that all children over three and four years old are entitled to 15 hours of free nursery education for 38 weeks a year, and some two year olds are also eligible.

employment options

If you’ve worked for your employer for more than 26 weeks, you have the right to request flexible working. This means you may be able to change your contract or working arrangements to make it easier to fit your job around childcare when it’s time to return to work. Flexible working can include working from home, going from full-time to part-time, or job sharing. Your employer would have to give you an objective business reason why they can’t do this. This option is worth thinking about, as it would give you or your partner the option to work around childcare.

babies don’t have to break the bank

Really, your little one doesn’t need a top-of-the-range stroller or a treasure chest full of toys. A decent quality, safety-assured pushchair will work just as well as the deluxe model. Your income is most likely to be at its lowest when your baby is very young – and newborn babies really don’t need as many bits and bobs as you might think.

Children do get more expensive as they get older, but the main costs for a newborn are clothes, nappies, laundry costs, and possibly formula.

making your money go further

There are simple ways to make your finances stretch during this period. Think about where you’re buying your food, and when any vouchers arrive in the post, use them! When you are taking care of your bundle, let others help to take care of you and your family.

Remember that you, as well as your baby, are entitled to free prescriptions and dental care on the NHS until your baby is 12 months old. Some families and mums-to-be can also get support towards milk, formula, fruit, veg, and vitamins through the Healthy Start Scheme.