Family Affairs and other matters

The Budget 2010

This is a guest post from Tamsin, writer over on the UK parenting deals website, PlayPennies.com (http://www.playpennies.com/).

I asked Tamsin if she could share her thoughts on what the new budget will mean for families and she has very kindly sent me over the following very informative information:-

There’s been a lot of talk since Tuesday 22nd June. The day that George Osborne announced the emergency Budget and outlined the things that were about to change, and these changes are not all good. The Guardian, The Telegraph, The Mirror and the Mail have all clearly said that families are among the hardest hit by this new budget.

While it’s definitely strange (well, to me anyway) that families are being targeted so definitively, this is no time to rock back in horror. It’s time to prepare for those financial hits and to be ready for whatever comes next.

I interviewed Mr Aggarwal from Aggarwal and Co (http://www.aggarwalaccountants.co.uk/about/index.html), a reputable chartered accountancy firm in Kent. When asked what he thought about these new measures in terms of families and he said, “It’s going to take some time to get through all the documentation that we’re now receiving about the Budget and I just can’t comment as to exactly how people are going to be affected.”
For him, it’s a week of slogging through heavy paperwork to fully understand the it. For us, it’s a week of terrifying headlines. So what exactly does this all mean? Middle income families have had their tax credits reduced, child benefit has been frozen for three years, the pregnancy grant will be abolished by April 2011, the Child Trust Funds are gone, and the £500 Sure Start maternity grant is being canned. Also the chancellor has said that single parents will be expected to go back to work when their youngest child goes to school.

This isn’t a pretty picture for parents at all, especially stay at home mums and single parents. Now it’s going to be harder than ever for women to choose to stay home with the children as the cost of living goes up and two incomes are almost essential.

The Citizens Advice Bureau (CAB) released a statement to the press on 23rd June (http://www.citizensadvice.org.uk/press_20100622) and Director of Policy, Teresa Perchard, said that, “The reality is that the proposed changes to personal allowances will be of little benefit, for example, to working families on the lowest incomes who live in rented accommodation. Although these families are in work, they are also likely to be in receipt of housing and council tax benefits and since both are means tested, any rise in take-home pay will result in a loss of entitlement to these benefits.”

So yes, the Budget has made most families sit back in dismay but all is not lost. I briefly chatted to a member of CAB, Katie Lane, and she said one thing that really made me feel a lot better, “See someone from our organisation, or your accountant, and find out exactly how your situation is going to be affected. Each family has unique qualities and issues and so each will be affected differently.”
Before you start stuffing money under the mattress, speak to an expert and get an accurate assessment of your situation and work out exactly what the costs are going to be for your family. Then it’s time to cut corners, save money and find other ways to make up the difference. With clever strategies and good advice perhaps we can emerge from this “emergency budget” without too many wounds.