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
Saturday 07 October 2006
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.
Money roundup video: It's getting harder to sort out a mortgage
Women born in 1950s facing severe financial hardship over pensions could have fates changed by Ros Altmann - should she choose to help
Is it really that bad in the bond market?
Five Questions On: GB Energy's new tariff
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
- 1 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 3 Amber Peat: Body found in search for missing 13-year-old who left house after argument with her parents
- 5 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
Day In a Page
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool