Finding time to plan our future

father and daughter playing

Savings

Jamie Jenkins

9th August 2018 at 9:30am

We just spent a week in Cyprus, marking our son Arlo’s first holiday abroad. It was fabulous, and he loved every minute, as did we.

At seven months old, we were taking something of a risk as we really didn’t know how well he would take to the journey. Surprisingly, the five-hour flight was a breeze, with him entertaining everyone on the plane with his smiles and laughter. The worried-looking chap in the seat next to us couldn’t believe his luck when it turned out to be a ‘happy baby’ he’d been allocated. He slept longer than Arlo did.

In Cyprus, Arlo spent most of his time in the pool. The inflatable aeroplane a friend had lent us turned out to be the most useful thing we’d packed. That, and the UV swimming outfit and factor 50 sun cream. I’m proud to say he doesn’t have a single tan line.

I’d reached a stage in life where I had ‘travelling light’ down to a fine art. But here we were pushing weight allowances again. In the end, it was Arlo who brought far too much stuff. I did tell him he wouldn’t use it all.

His bath seat turned out to be the least useful item we packed. There wasn’t a bath.

It’s hard having to constantly think about his needs, rather than just our own.

But, you do whatever you can to make things work when you have a baby, I’ve discovered. The big difference on holiday was that, between us, we had time each day. My wife had no commitments and I didn’t have to go to work.

That, of course, is the wonderful thing about being on holiday.

It’s time to talk about child care

It gave us time to discuss a few things as well; things we never ordinarily get round to because they’re simply not the priority. Things like child care.

We haven’t concluded on this, but regardless of what work my wife and I have to do, we want Arlo to spend some time away from both of us – and with other babies the same age. But it’s not cheap.

Like many others, we are contributing towards childcare vouchers using the allowances available and this is an obvious step for those who can afford it, given the helpful tax saving.

Having started that long before it was needed, we’ve built up a decent buffer.

If this affects you and you want to find out more, the Government provides a good guide to how childcare vouchers work.  There are important changes happening this year with the voucher schemes closing to new applicants from 4 October, so it is well worth having a look now if it’s something you are considering.

Child benefit: how it helps you build the State Pension

The other thing we’ve discussed recently is Child Benefit. Broadly, the Government will support parents where neither earns above £50,000, which is when a tax charge starts to apply. Do bear in mind though that laws and tax rules may change and your personal circumstances also have an impact on tax treatment.

At £60,000 a year, the resultant tax charge cancels out the benefit payment. However, if you’re lucky enough that one of you does earn above £60,000 you should still register for Child Benefit even if they don’t claim it.

It’s really important because, among other things, it ensures that National Insurance credits are made for the non-working parent, which keeps their State Pension entitlement up to date.

There have been a number of recent reports in national newspapers about parents not registering, who may not get their full State Pension entitlement as a result. Some estimates suggest this could affect up to 200,000 people, the majority of which will likely be women.

Again, the Government provides plenty of information on Child Benefit.

Having free time on holiday makes me think a lot about retirement. We’ll definitely have more time, but we’ll only have money if we plan now.

That much is straightforward.

The views expressed here are those of the author, not Standard Life.

Your pension is an investment – its value can go down as well as up and may be worth less than what was paid in. This article shouldn’t be taken as financial advice and is based on our understanding in August 2018.