HELP FOR SUPERMUMS
THEY will be the quiet et heroes, or rather heroines,es, of the post-Brexit economy.my. Welcome to the world of supermums, the hard-working -working women who keep Britain’s households afloat but risk wrecking their own finances in the process.
Of the 14million women at work in the UK, more than two million are now breadwinners – of whom hom twothirds are single parents.
But stay-at-home mums s are far from idle, doing the equivalent alent of a £30,000 salary in unpaid work and childcare every year, according ording to insurance firm Sunlife.
These mighty mums are re far from invincible. Squeezed d by the cost of childcare and the impulse to provide a homeme for Generation Rent, they y are also footing the care bill for elderly parents and in-laws.
Indeed, research from pensions adviser Portafina shows a third of working adults subsidise our ur ageing population to the tune of f at least £10,000 a year.
Sadly, mums pay the price for their selflessness, often losing out on higher earnings, better tter returns on their savings and nd their full pension entitle- ment along the way.
So here is our six-point t plan to help supermums get financially fit in 2017.
1 TONE UP YOUR BUDGET
BLITZ any lingering debts. Set aside money to pay down store cards and loans as quickly as possible.
You can do a ‘soft’ credit check to see if you qualify for a top zero per cent balance transfer deal, such as the 43 interest-free months now offered by MBNA.
Take advantage and pay down what you owe. Note down renewal dates for your insurance policies and the end of costly contracts on a calendar so you can shift to better deals, and kill any needless direct debits.
2 SLIM DOWN YOUR CHILDCARE COSTS, BULK UP YOUR BENEFITS
THIS year the Government is rolling out a new tax-free childcare scheme, available to parents who work more than 16 hours a week. Each parent must not have income of more than £100,000 a year.
Parents can get 20 per cent of their yearly childcare costs, up to £10,000 per child, paid for by the Government. This could mean payments of up to £2,000 per child. Tax- free childcare vouchers offered by employers are the first port of call for higher rate taxpayers with annual childcare costs of £6,252 or less, and basic rate taxpayers with costs of up to £9,336.
All three-year-olds and four-yearolds in the UK are entitled to a minimum of ten hours of free early education for 38 weeks a year. Some two-year-olds are also now eligible, but this will depend on your income status. Check with your local council.
3 WEIGH UP YOUR MORTGAGE
YOU may have clung to a standard variable rate mortgage because the rate is low, but interest payments are bound to rise at some point. Claire Walsh, chartered financial planner at Brighton-based Aspect 8, says: ‘There are still some really good mortgage deals out there. If you fix for a long time it will be peace of mind. Known monthly repayments with no nasty surprises will make budgeting easier.’ Jump on tip-top deals before they vanish. For example, Coventry Building Society has a ten-year fixedrate deal at 2.69 per cent for a fee of £999.
4 SHAPE UP YOUR PENSION
TAKING time off work to look after young children can have a negative impact on pension planning. Steven Cameron, pensions director at Aegon UK, says: ‘Mums often face a disrupted working life, whether it is taking time off to have children or working flexible hours to accommodate childcare.
‘Any period outside of paid employment means no pension contributions from an employer, and just a few years’ gap can make a big dif difference to your pension pot.
‘It can also lead to fewer years contributing to national insurance and this affects the amount of state pension women can claim.’
He advises women to pay voluntary national insurance contributions and make sure they claim child benefit.
A quirk of the rules means a mum receiving child benefit for a youngster under the age of 12 gets national insurance credits towards their state pension record. This amounts to £5,000 extra in state pension over a typical retirement.
5 MAKE YOUR MONEY SWEAT
IF YOU want to really make your money work harder, you will have to move further up the risk scale.
Drip-feeding your money into an investment plan over the long term gives you the best chance of weathering the highs and lows of stock markets.
To help you with investments, you can either enlist a financial adviser, using website Unbiased to find the right one, or manage your money through a ‘do-it-yourself’ investment platform.
If you use a platform, you will pay either a flat rate or a percentage of your investments, dealing charges and extra fees for any funds you invest in, though some platforms cut these fees on the most popular funds.
Do not invest any money you cannot afford to lose and remember that past investment performance (either good or bad) is no guide to the future.
6 HAVE A BACK-UP PLAN
CAPITALISE on the relatively cheap cost of life insurance if you have not done so already. Policies now cost as little as £7 a month if you are a healthy, non-smoking 35-year-old taking out a £90,000 plan over 25 years.
Also do not forget ‘Cinderella’ insurance policies, which will pay out if you fall ill or have a serious accident.
Lisa Conway Hughes, founder of website Miss Lolly, says: ‘You should ask yourself one simple question. If you are not there to hold everyone together, how would the family manage if you died or were off work long term? If the answer is badly, protection insurance must be a consideration.’
An income protection policy will replace your earnings if you can no longer work because of serious illness. Using a broker or comparison website will help you to sniff out the best deal.