How mums and dads can claim a better deal

The new maternity rules are valuable and parents can get other help, too, says David Prosser

Have you got £47,000 in spare cash? If not, consider your approach to family planning carefully - this is the total cost of bringing a child up to the age of five, according to research from friendly society Liverpool Victoria.

The good news, of course, is that you don't have to shell out the whole cost in one payment. And not only are there ways to cut the cost of childcare but prospective parents also have legally enshrined rights to a range of benefits.

In fact, these have just been improved. While new age discrimination laws, introduced last Sunday, made all the headlines, reforms of the rules on maternity benefit, which came into force at the same time, have been less well-publicised.

The most significant reform is that women are now entitled to nine months of paid maternity leave, up from six previously. This applies with any baby due after 1 April next year, even if the baby actually arrives early.

What the new rules mean in practice is that pregnant women will be able to take nine months off work and be paid for the whole period. But that doesn't mean full pay. What they'll actually get is Statutory Maternity Pay (SMP). SMP - paid by your employer and then reclaimed from the Government - is worth 90 per cent of your pay for the first six weeks of your maternity and then £106 a week thereafter.

Some employers are more generous than this, but this is the minimum you should receive. You are also entitled to take a further three months of maternity leave, though you won't receive SMP for this period and your employer is under no obligation to pay you.

The extra three months of SMP will be worth at least £1,370 to mothers who take it - more if your employer is more generous - and they do not affect your rights when you return to work. In addition, if you are a member of an occupational pension scheme, your employer must maintain its contributions on your behalf for the whole period during which you receive SMP.

Another change, which the Government reckons could help 20,000 women a year, is that there will no longer be a minimum employment requirement for claiming maternity rights.

Until now, women have only automatically qualified for full maternity rights if they have worked for an employer for 26 weeks by the 14th week of their pregnancy. From 1 October, however, the only requirement is that expectant mothers must have worked for an employer before they became pregnant, even it was only for a matter of days.

One final change affects women after giving birth. If you want to - and your employer agrees - you can work up to 10 "keeping in touch" days before officially returning to work, without affecting your SMP or maternity leave rights. How much you are paid for these days depends on what you can negotiate with your employer.

It's important to note that the new maternity rules do affect two other important time-related issues. First, your employer is only required to keep your job open for six months. If you take longer off, you are still entitled to return to work, but you will have to accept a suitable alternative job. Similarly, your employer only has to continue offering most employee benefits - gym membership, say - for 26 weeks.

Prospective fathers, on the other hand, have missed out under these latest reforms. The Government had intended to allow fathers to take up to three months of their partners' maternity leave as unpaid paternity leave. So, for example, husbands whose wives take six months off work, would be entitled to three months' of paternity leave.

However, a spokesman for the Department of Trade & Industry says this change won't now be introduced until the Government extends paid maternity leave to a full year, which it has promised to do before the end of the current Parliament.

In the meantime, prospective dads are entitled to two weeks' paternity leave, as long as they have been employed for 26 weeks by the 14th week of their partners' pregnancies. Employers only have to offer statutory paternity pay - paid at the same weekly rate as SMP - but many are more generous.

Still, there are other ways to save money when the baby arrives. David Newman, director of marketing at Co-Operative Insurance has launched a money-saving guide for expectant parents.

"The emotional and physical strain of starting a family is stressful enough for most people," Newman says. "Added to that, the financial strain and the whole experience can become quite daunting."

Co-Operative Insurance says that new parents should collect vouchers. Retailers such as Boots run baby clubs. The idea is to collect points from purchases which can then be redeemed in store. These companies have different incentives throughout the year with a lot of free offers and money-off vouchers, the value of which can soon add up.

Parents could save around £30 on an evening out by getting together with friends who also have young children and exchanging babysitting favours. Another tip is to use real nappies. Reusable nappies are no longer difficult to wash or uncomfortable for babies, plus they're better for the environment. Disposables cost around £920 over two and a half years while reusables come in at £200.

And new parents should make their own purees. Once your baby makes it on to solids, the cost of jars of baby food can soon add up. Your own purees made from fruits, vegetables and even family meals will be cheaper.

While parents naturally want all the latest equipment, a lot of things, from baby monitors to toys are just as good second-hand. Check out the internet or visit jumble sales run by organisations such as the National Childbirth Trust.

It also makes sense to sell second-hand. EBay can help you clear out your wardrobe once the baby arrives. Most maternity wear is good as new.

You can take the same approach with some baby equipment and toys, once your child has outgrown them.

'I didn't even consider cash savings for my two boys'

Despite early scepticism about child trust funds, the Government scheme that offers savings vouchers worth at least £250 to every new-born child, the concept is catching on. A Government audit published last week showed that in the first year of its operation three in four parents eventually opened an account.

However, with around 80 banks, building societies, life insurers and friendly societies offering three different types of child trust funds, there has been confusion.

By far the most popular option is a stakeholder account. With these plans, the child's starting £250, plus any subsequent contributions made - the maximum is £1,200 a year - are invested on the stock market for the first 13 years.

Usually, the stock market investment is in an index-tracking fund, a cheap vehicle that follows the market up and down. From ages 13 to 18, when the child trust fund matures, 20 per cent of the money is moved into lower risk assets each year, to reduce the impact of market crashes.

The two alternatives are cash child trust funds - where the money is held in a tax-free bank or building society account - and pure stock market funds - where there is no automatic re-allocation.

"The cash option is only appropriate for people who really cannot stomach the idea of the stock market," says Anna Bowes of financial adviser Chase de Vere. "You'll get a substantially better - though not guaranteed - return from the stock market ."

Most of the stakeholder plans on offer are similar, because fees are capped and they all track the UK market. But Bowes likes a variation on the theme, from Family Investments, because it gives exposure to actively-managed funds run by top-performing manager New Star.

This is the account that Lisa Atkins (above) opened last year for her two-year old son Elliot.

"My eldest, Charlie, missed out on child trust funds but I had opened a separate stock market plan with Family for him," says Lisa. "I didn't even consider cash savings for the boys because I was confident that over 18 years, the stock market would be a better bet."

Amongst the pure stock market child trust funds, Bowes recommends The Children's Mutual. "It offers the most choice, with different funds on offer from three separate managers - I particularly like the Invesco Perpetual range, or Gartmore's Cautious Managed fund."

If you do want a cash child trust fund, the best current rates are from Yorkshire and Britannia building societies, which pay 6.25 per cent a year.

Finally, remember that all money in a child trust fund must be handed over to the child at age 18. For this reason, many parents choose to do most of their saving for children using other arrangements, so that they will have more control of the money in the future.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
Young Winstone: His ‘tough-guy’ image is a misconception
people
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
PROMOTED VIDEO
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
Arts and Entertainment
L to R: Hawkeye (Jeremy Renner), Captain America (Chris Evans) & Black Widow (Scarlett Johansson) in Avengers Assemble
film
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Arts and Entertainment
Pharrell Williams' “Happy” was the most searched-for song lyric of 2014
musicThe power of song never greater, according to our internet searches
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
Voices
Strictly Come Dancing was watched by 6.9m viewers
voicesIt has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Arts and Entertainment
Roffey says: 'All of us carry shame and taboo around about our sexuality. But I was determined not to let shame stop me writing my memoir.'
books
News
i100
News
Caplan says of Jacobs: 'She is a very collaborative director, and gives actors a lot of freedom. She makes things happen.'
people
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

    Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

    Selby Jennings: Quantitative Research | Equity | New York

    Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

    Selby Jennings: SVP Model Validation

    Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    Day In a Page

    War with Isis: The West needs more than a White Knight

    The West needs more than a White Knight

    Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
    Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

    'The day I was shot by the Taliban'

    Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
    Revealed: the best and worst airlines for delays

    Revealed: the best and worst airlines for delays

    Many flyers are failing to claim compensation to which they are entitled, a new survey has found
    The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

    The stories that defined 2014

    From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
    Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

    Disaster looming? Now you know where to head...

    Which British city has become the first to be awarded special 'resilience' status by the UN?
    Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

    Finally, a diet that works

    Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
    Say it with... lyrics: The power of song was never greater, according to our internet searches

    Say it with... lyrics

    The power of song was never greater, according to our internet searches
    Professor Danielle George: On a mission to bring back the art of 'thinkering'

    The joys of 'thinkering'

    Professor Danielle George on why we have to nurture tomorrow's scientists today
    Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

    Monique Roffey interview

    The author on father figures, the nation's narcissism and New Year reflections
    Introducing my anti-heroes of 2014

    Introducing my anti-heroes of 2014

    Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
    DJ Taylor: Good taste? It's all a matter of timing...

    Good taste? It's all a matter of timing...

    It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
    Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

    How we met

    Olivia Jacobs and Ben Caplan
    Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

    Bill Granger's healthy breakfasts

    Our chef's healthy recipes are perfect if you've overindulged during the festive season
    Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

    Who does your club need in the transfer window?

    Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
    The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

    Michael Calvin's Last Word

    From aliens at FA to yak’s milk in the Tour, here’s to 2015