Baby Budget Help Needed Please

[Deleted User]

I have been working out a baby budget and been onto the government website for tax credits etc, most confusing.

From what I can gather, please could someone confirm if the following is true for what i've worked out.

We will get £73 child benefit a month
We will get £45 family element on tax credit
We will get £45 baby element for the first year of baby's life.

I do find that website most confusing and obviously getting our budget correct is very important.

DP will be earning £31,250
I currently earn £21,500 (37 hr week) but have worked out my p/t salary will be £8,700 (15 hr week) but I may earn slightly more as that is based on my full time tax amount, I assume I will be paying less tax when part time.

I'd be grateful for any advise.
Thanks,
Bay

clarew

um, i too am looking into benefits/taxes to do with children. (i have 2 and would like another next year, but am unsure financially if we could manage.) Sometimes i wonder if i would be better off not working at all, rather than with the part time hours i do, as it means we are on minimum tax credits.

I am no expert but think you get around £16-17 a week child benefit for the 1st child (dropping then to around £10 for subsequent kids). We also get £40-42 a month tax credit (basically the least you can get), and yes, for the 1st year of the childs life you get another roughly £45 a month until they are 1.

personally although we have 2 days childcare, we receive no help with that, think either you have to be spending more money on childcare, or earning less. The tax credit system only looks at your income, not where you live and the high cost of living/mortgages in london. (think i need to move to wales/up north to make day to day life cheaper, ha ha!)

ps-as soon as baby is born send off the child benefit bits so you can get the money asap, and similarly phone up the tax credit people about the extra payments (they were quite helpful to me). Helps to buy more than 1 of the original birth certificates, as often to have to send them away for things like child benefit forms/passports etc, so is worth having more than 1, so you are not held up waiting for an office to return them, before you can send the next one off.

congrats by the way!

essexhoney

http://www.entitledto.co.uk/under60.asp
is a very good site and not that confusing neither

congratulations!!

Bun

We will get £73 child benefit a month
We will get £45 family element on tax credit
We will get £45 baby element for the first year of baby's life.

Hi Bailey,

Congratulations! Your figures sound very similar to the ones we had at the time and the figures you quote above are what I was paid for the first year. It then goes down to same but without the baby element if your circumstances were the same. At this level of income we did not get any help with childcare at all, and as has been mentioned if you are considering going back calculate how much you will be bringing home if you are paying childcare. I went from three to two days a week with hardly any difference in takehome pay as it all went to the nursery and the taxman. I use this pay calculator and you put in your gross pay, can be very interesting!

http://www.wellwoodhoyle.com/ard/calculators/payslip.asp?AID=326&SID=11&FID=5380

Bun

jellyhead

hi bailey

yes those figures sound correct to me, it's what we get on a salary of 25 between us, i think 24 to 25 is the cut-off point, with a further cut-off of around 58 where you stop getting tax credits but still get child benefit. no clue about childcare (but i think you would have to work 16 hours minimum), but as long as you earn below the higher threshold of 58-ish gross, not net then you'll get the amounts you mention above. there's something about not having to include maternity pay when working out what your income was, but if your partner earns more than mine then i don't think any of that will make a difference to the amount you'll be awarded. if you come close to the higher threshold then it's worth asking somebody with more knowledge about how pension payments don't have to be included.

kidscostafortune

If you have child care planned, take advantage of childcare vouchers, my husband and I worked out we would recieve the lowest tax credit award, so getting childcare vouchers works out better, for £217 deducted from pay for a voucher it actually costs about £135 per month, both of us do it, it helps budget childcare as its gone before you get it and works out miles better than tax credits.
Hope this helps,

Spendless

you'd need to work minimum 16 hours to get childcare help via tax credits. If you play around with figures on the entitled to website using figures with and without childcare you'll be able to work out if you will receive help. If you don't,or what you'd receive isn't worth it or you prefer to stick under 16 hours I also give childcare vouchers a big thumbs up. I don't work so help via tax credits wasn't available also we have to add value of hubbys company car onto income (£7k added on:mad: ), we've used the vouchers to pay for nursery whilst I've gone to college. wouldn't have been possible without them. All employers administer the scheme differently, ours is very flexible and we;ve changed nurseries and suspended payments for a short while but not everywhere lets you do that.
Not totally sure if your DH is a 40% tax payer, as unsure where it kicks in but if he is or his next pay rise makes him one then there is an even bigger saving to be had.

ruthyjo

Hi -

my husband earns just a bit more than yours (just enough to pay 40% tax on the last bit!) and I earn about the same as your fulltime pay for my working week (21 hours). We have three children, one in nursery three days a week and two in out of school club three days a week. We don't qualify for any childcare help so I doubt you would. Best to regard this as a blessing - you'll be plagued with less tax credit letters (although still reams) and won't have to keep them up to date on any changes, risking their wrath if you forget to pass on a change of hours etc, or worry that you're being overpaid and will in future be hit with a demand to pay it back (as happens to loads of parents every year).

Once you have children a lot of other expenses disappear (e.g. you can never get out at night, it's not worth wearing nice clothes for a baby to throw up on etc) and I think lots of people manage on a lot less than the figures you quote. Good luck!

Spendless

ruthyjo wrote:

Hi -

my husband earns just a bit more than yours (just enough to pay 40% tax on the last bit!) and I earn about the same as your fulltime pay for my working week (21 hours). We have three children, one in nursery three days a week and two in out of school club three days a week. We don't qualify for any childcare help so I doubt you would.

ruthyjo. Get your husbands employer to look into childcare vouchers. We have a similar situation. My husbands salary is slightly under paying 40% but his company car makes it that he is a 40% tax payer. Childcare vouchers made a huge difference to our childcare bills as they are tax and NI free (upto £55 a week).
You could also look into childcare vouchers but obviously they wouldn't be as big a saving as you won't be paying as much tax and NI as your OH.

ruthyjo

Spendless - we have been getting childcare vouchers from my employer and saving the basic rate tax. They have represented a substantial saving as we get the full £243 worth a month. However the providers my employer use have caused loads of problems, failing to pay the childcare providers almost every month until I have chased them repeatedly. (Got to the point where the nursery where threatening not to have daughter in). When husband's work looked at doing them there wasn't enough demand, apparently.

[Deleted User]

Thank you for your help everyone, its reassurring to know that those figures are best part ok. I don't intend to work more than 14-17 hours per week and hopefully we won't need childminders due to my shifts and parents offer of help.

In that case we should manage fine. Its just hard not to worry as DP has debts (until Feb 2008) and an expensive hobby which he WON'T ever give up and I wouldn't ask him too. If those two factors weren't around then I possibly could be a SAHM but it would be tight. Maybe when No.2 comes around, he might realise how benficial it would be and be more prepared to compromise his hobby a bit more.

I don't know I worry more about money than he does and have never been in debt and quite money savvy thanks to this site, he is so laid back and in debt - that's probably why. He is getting better though, until he met me he hadn't bothered dealing with his debts and he didn't worry about it. I made him face up to it and now he wishes he hadn't put himself in this position and been more wise.

Hindsight is a wonderful thing eh?

This baby of ours will definately learn about money and budgeting!!!