December 27, 2015 | Leave a Comment
With the escalating costs of university fees and housing (amongst other things!) young people face an increasingly daunting financial challenge ahead of them. Therefore, it’s never too early to start saving for your children’s future!
The most common way to save money for children is through Child Trust Funds and Junior ISAs. Child Trust Funds are long term investment funds that were introduced by the government in September 2002. There are two types of fund: cash funds, which are completely tax-free, and share-based funds, which have dividends paid to them with 10% tax already deducted. Both types of Child Trust Fund mature and become available to a child on their 18th birthday, at which point they can be converted into an ISA.
Junior ISAs replaced Child Trust Funds in 2011, for children born after the 2nd January of the same year. The total amount that can be invested in a Junior ISA is set each year and is currently £4,080, for the tax year 2015-16. These investments can either be placed in a Junior Cash ISA or a Junior Stocks and Shares ISA—or, alternatively, split between the two.
National Savings & Investments (NS&I) offer two alternatives to Junior ISAs and Child Trust Funds, both of which are tax-free. These include Premium Bonds and Children’s Bonds. Premium Bonds require a minimum investment of £100 and are suitable for savers who want the chance to win up to £1 million in a monthly prize draw. These bonds are particularly popular as gifts for children from family members and friends. Children’s Bonds, by contrast, are suitable for parents who want a long-term, tax-free investment for their children and can leave their investment for a minimum of five years. The minimum investment for a Children’s Bond is £25, with a current rate of interest of 2.5%.
Other savings investments for children are liable to tax, if the pre-tax interest earned from these investments exceeds £100 per year—or £200, if both parents are contributing to the pot. In this situation, the child’s interest payments will be taxed as if they belonged to the parent—and this tax will apply to the whole payment, and not just the income that exceeds £100. However, recent and upcoming changes in tax law mean that the £100 tax-free limit on savings incomes (from interest payments) may become less of an issue in the future—provided the child’s income is assessed against that of a parent.
December 18, 2015 | Leave a Comment
Childcare comes in many forms: from nannies and pre-school nurseries to wraparound care and holiday clubs for older children. These services provide essential support for many working parents, in order to balance the often conflicting demands of work and family life. But childcare can be expensive and, in some cases, difficult to find. To reduce the financial burden of childcare, the government introduced a weekly free entitlement to part-time care for all 4 year olds in 2000, which was expanded to include all 3 year olds in 2005. In 2013, this program was further extended to include 2 year olds from low income families. However, to ensure the successful uptake of childcare services, parents need to be fully aware of all the options that are available to them, both in terms of funding and provision. This requires clear channels of communication between a wide range of participating organisations and individuals: including local authorities, childcare providers, health workers and many more. But, how does the system work? And is it functioning as it should?
In order to explore these questions, and many more, the Department for Education recently commissioned its own research on the subject—which aimed to examine the quality and accessibility of existing information on childcare and determine whether the system can be improved. This research was conducted by Ipsos Mori and the Childcare Trust, and was published in February 2015.
The results of this study reveal that most parents use a wide range of resources in order to investigate and inform their decisions on childcare. However, the quality of the information they receive can be extremely variable. Furthermore, some channels of communication that are effective for some parents, are not available to all; whereas other channels of communication, that should be effective for all, are often overlooked.
The most important source of information, by far, for informing parents’ decisions on childcare is through word-of-mouth, either directly from friends and family or through social networking sites, such as Netmums and Mumsnet. Unfortunately, however, both of these channels of communication often exclude parents who are socially isolated. This might be due to linguistic barriers, for parents who don’t have English as their first language, or the ‘digital divide’, for parents on low incomes—with limited or no access to the internet. Single parents, who are often displaced from their communities, as a result of relationship breakdowns, can also be excluded. Another surprising fact to emerge from the study was the general underuse of local government services. Most parents were completely unaware that local authorities have an important role to play in informing decisions on childcare, through the Family Information Service. Indeed, only 5% of parents who were questioned during the study had turned to this service for help.
The single most important factor that influenced the uptake of childcare among parents was cost: clearly it has to be affordable. However, information on the funding and cost of childcare can often be lacking or misleading. In particular, details of free entitlement can sometimes be difficult to find (even from local authorities), and parents often feel misled about additional hidden costs that are not covered by the free entitlement. For example, certain providers require the purchase of extra hours in order to fill a minimum block booking; whereas others may charge top-up fees or impose financial penalties for late drop off/pick up. These additional costs are a particularly significant for families on low incomes.
Certain childcare services were revealed, by the report, to be generally lacking in information for all parents. These include holiday clubs and wraparound care for school-aged children. This is a significant shortcoming of the system, since these services provide essential support for many working parents.
Based on the major results of this study, the author of the report lists a number of recommendations to help improve the quality of communication on childcare. These include improved signposting towards important sources of information (particularly Family Information Services) through existing services that are currently used by all parents, such as GPs and health visitors. The report also recommends the use of more traditional methods of communication, such as verbal communication with health professionals as well as the provision of printed booklets, in order to complement websites and social media. Both measures would particularly benefit parents who are isolated from society; as a result of linguistic or other social barriers. The report also recommends that the quality of the information available to parents should be high, which indicates the need for improvement. However, there are no specific recommendations to improve the communication of hidden costs, or the provision of holiday clubs and wraparound care for school-aged children. It remains to be seen, therefore, whether improvements in these areas will be made in the future.
Written by Rob Hodgkison, Harmony at Home Ltd. All rights reserved, 2015
December 17, 2015 | Leave a Comment
Recently there has been an influx of childcare websites, where parents can search for childcare workers online. We have detailed, below, the five services not provided by online nanny search websites, in order to explain why you should always use an accredited nanny agency, such as Harmony at Home.
Online search websites do not screen nannies. They only gather information that is provided by the nannies themselves. An accredited nanny agency, by contrast, performs extensive screening, background checks, CV and employment history checks along with referencing—saving you a considerable amount of time and trouble both initially and throughout the entire recruitment process.
Online Agencies do not check the status of the background check, they rely solely on the nanny or work seeker’s information as given. An accredited nanny agency performs a check on an existing DBS status along with a new DBS check, if required.
Online agencies offer a search facility for parents to search for nannies. However, an accredited nanny agency offers a whole lot more, including a bespoke and tailored service to specifically meet your needs and requirements. An accredited nanny agency will work with you in order to best understand your requirements, and will only present candidates who meet your requirements. All candidates will be recommended to you based on many years of experience in the industry.
For online childcare websites you will need to pay an upfront fee. With an accredited nanny agency you only pay a finder’s fee for the successful introduction of the right nanny.
Not all online nanny agencies provide direct service help with taxes, insurances and contract: most will provide resources but few will provide services. An accredited nanny agency will guide you and provide templates, advice and guidance where required.
Harmony at Home is accredited with Best Bear Childcare, and is a Member of PACEY (the Professional Association of Childcare and Early Years) along with being registered with ICO (Data Protection) and the International Nanny Agency Association.
Contact us today for more information.