Yes as you might expect, I was watching the Budget yesterday; sporting both my ‘money journalist’ hat and one as a working mum. And while I wouldn’t go so far as to offer to buy the Chancellor a drink, I was pleased to see he’s had a significant rethink on those controversial cuts to child benefit which were on the cards next April.
As you’ve probably read, the Chancellor’s changes mean child benefit won’t be wiped out once your income tops a certain point. We’re now talking a ‘gradual’ reduction from £50,000 and you don’t lose the lot until either parent brings home £60,000 a year.
As a working mum I think it’s this ‘phasing out’ that’s key and levels up what was otherwise a very bumpy playing field. Without this new tweak to the system parents earning just a few pounds over the limit – thanks to a bonus at work or a bit of overtime to pay for their summer holiday – would have immediately lost their benefit of £1,000 plus a year.
Having been a single parent myself once I know just how tough juggling the piggy bank solo can be, and understand why some single parents say the system’s unfair as any cut is based on the highest salary. But let’s remember you need to earn over £4,000 a month, (£50,000 a year), to see any loss to your child benefit; which to my mind is a pretty healthy income and twice the average salary.
Another change I’m pleased about as it will boost the earning power of working parents is this forthcoming hike in the ‘personal allowance’ rate, which is the amount you can earn before paying tax.
Personal allowance now goes up to £9,205 next April and compared with last year’s rate of £6,475 we’re talking a huge 50% rise! How many working parents ever get a pay rise on that scale?
Most of the working mums I know juggle jobs around school hours or work part time so they can be around for their family. This tax free boost means more of that hard earned cash will be going straight where it’s needed: into their pockets.
Sue Hayward is a money and consumer broadcaster, journalist and author. Sue writes and talks on family finance on both radio and television and contributes to many of the women’s magazines and money websites. Sue’s written two books, the latest of which is ‘How To Get The Best Deal’.