It seems to me that there is something of a baby boom going on just now and recent statistics back this up. Without doubt, starting a family is life changing and becoming parents is a joyful and emotional event for young couples. That said, amidst all the delight it is also a time when new parents should be giving consideration to some legal and financial matters.
- According to “The Guardian” newspaper the cost of raising a child to the age of 21 has soared to £222,458. Quite a lot of money: so financial planning is a must.
- When a baby is born, both parents are respectively entitled to maternity and paternity leave. New Mums must take at least 2 weeks maternity leave after giving birth (or four if they work in a factory). Any working Mum is entitled to 52 weeks of maternity leave – 26 weeks of ordinary maternity leave as well as 26 weeks of additional maternity leave. Statutory Maternity Pay (SMP) is payable for 39 weeks. For the first six weeks it is paid at 90% of the mother’s weekly earnings with the following 33 weeks being paid at the SMP rate or 90% of weekly earnings, whichever is the lowest. The SMP rate from April 2013 is £136.78 with the standard rate being reviewed every April. For Dads the allowance is much less generous, with only two weeks paid paternity leave if the mother uses her whole SMP allowance. Flexible parental leave will be introduced in 2015 allowing parents to choose how they share the care of their baby during its first year. It is important that would- be parents know what leave they are entitled to and inform their employers accordingly.
- Many couples find that their city centre love nest flat may no longer meet their needs as a trio. Perhaps it is time to move up the property ladder to somewhere with more space.
- Couples raising a family and buying a home together need to take out life insurance. The amount to be insured is entirely up to the couple concerned but certainly should cover the mortgage in full and ideally should provide income cover as well.
- Do not forget about wills. When a baby is born it is vital that wills are drawn up to ensure that in the event of both parents dying , provisions are made to ensure their child is looked after. Who is to have the guardianship of the newest arrival in those tragic circumstances? Grandparents may be getting a little old for child rearing, siblings may not be available and friends may be reluctant. Although it seems morbid, it is an issue that needs to be discussed and resolved.
- Children do not stay babies forever and most parents will inevitably be required to pay for child care, school fees or university fees, especially south of the border. Depending on individual circumstances parents may be in a position to help children out financially while they are students , or when buying their first home or getting married . It might be appropriate to set up trusts to protect assets for the future. Advice about how to save on inheritance tax and capital gains tax should always be sought.
We at Mitchells Roberton can help with all of the above. If seeking advice please contact Elizabeth Baker on 0141 552 3422 or email her on firstname.lastname@example.org.
Thinking of babies I decided to check out the most popular names for babies in Scotland. You might be interested to know that the top three favourites for boys are Jack, Lewis and Riley and for girls Sophie, Emily and Olivia!