To think Child Benefit goes into the family kitty?

[summerfish]

I was talking to a friend yesterday, and she said that she saves all of her child benefit in a special account, which she will give their children when they are 18.

I have never done this at all! Child benefit goes straight into an account which my husband and I use for family expenses. Also I have no idea how this would work practically, as the first child would presumably get a much larger slice of the pie, owing to the fact that the second child gets less CB! Not to mention, the fact that I have to pay my child benefit back via my self assessment in any year that I earn over a certain amount.

AIBU To think that child benefit is to be used for every day expenses?

When I was married I was very thankful for child benefit as that and tax credits (although they were dependent on my husband’s earnings) were all the money I had access to.
Now I’m single it just goes in the pot. It’s not a bad idea to save it if you can afford to though.

We save it in their accounts, although when times are really lean we ‘steal’ it for every day stuff.
However, our life style is quite modest. Sometimes I do wonder if we should be using some of the benefit money to give them broader experiences now, rather than a good foundation when starting adult hood. It’s a tough one.

@LadyCatStark

We don’t get it as DH earns too much but if so many people can afford to save it then maybe the threshold is too high??

Or maybe some people are not very good at saving at all?

Just a heads up for those who say they don't get it because they earn too much... it's REALLY important you apply for it anyway and pay it back as necessary. It's a ridiculous faff but essentially means if you have time out from your career or are a SAHM, your National Insurance contributions are paid for you, this is important when you get your pension.

I totally agree the current system is unfair. You can have 2 parents earning £49k each who receive the benefit (household total of £98k) or a family with only one parent working, earning £50k, who doesn't get it.

And for those who thought I was "worked up" about how my friend manages her money... I'm not sure how you got that from my OP!

a family with only one parent working, earning £50k, who doesn't get it

Yes they do, it isn't totally withdrawn until you earn £60k, probably more as it's after pension contributions.

I get your point about NI contributions, but seeing as many people have over 50 years potentially between leaving school and state retirement age, they can take quite a few years out of employment before their state pension is affected, so it's not always a factor.

As for whether people who can save their CB should still receive it, as others have said, people's spending varies hugely, so you shouldn't punish people who are more frugal, do without or simply manage their money well, by taking away CB when others with the same incomes receive it.

On the matter of whether a family with a £60k income should or should not be able to save, if they're in a high cost area with one £60k salary, or both parents working with high childcare costs, they're probably not going to have a lot of money available to save after they've paid their accommodation costs and childcare if applicable.

But I do agree that the single earner/double earner £50k limit is unfair. What they should have done was done away with universal CB and included the money in the TC/UC system, so that it was based on family income and tapered away as incomes rose.

Ours went straight to a charity we support.
Rather it did some good, as we never needed it.

I put £20 into a savings account for dd and the rest goes towards household bills/food. That way we can afford to do the same for future children.

BarbaraofSeville the problem with means tested, tapered benefits is that the cost to administer them costs the Treasury more than the benefit (see the utter cock up with UC) and many people who are entitled won't claim.

It's the universality of CB which makes it easy to claim and administer hence it mainly going to where it is needed. As pp says, even if the claimant has to pay it back via self-assessment, they still receive NI contributions and the claim is ongoing should their circumstances chance.

I don't get CB because my husband earns over the threshold. Fair enough.

What really pisses me off is that households with two ppl earning right up to the threshold still get it. People in these circs do not need CB - period.

That is grossly unfair.

I think an urgent review is needed on this benefit with the threshold applied to the household, not per taxpayer.

I know that, but most families get TC or UC to help with childcare costs at least anyway, so the administration is already being done.

My DD is on MW. She pays two thirds of it into the Credit Union. It's then used for extras at Christmas that she wouldn't be able to afford and towards extra spending on holiday. She uses the loan facility and when the account gets to over what she needs in it, she transfers it to the children's ISA. Wider family put money into their ISAs rather than give presents.

That way if a crisis happens, she has an amount that she can access. She has her own small savings as well.

To say if you don't need to spend it, you don't need it is ridiculous.

We are in the last year of claiming as DS is 17...we’ve never been able to put the money away so it just gives straight in the family pot.

Fair play to those who can afford to save it though.

Depends. Ours goes into an account and only gets used for kid related stuff. Clothes, school uniform, shoes, the odd soft play trip.

a family with only one parent working, earning £50k, who doesn't get it

As someone has said, that's not quite correct, but it gets to the stage that if you are under the 60k threshold, it's a pain in the arse as you have to do a tax return and then pay a percentage of it back.

We've binned it as with my salary and "benefits" such as a car (that I pay tax on) meant we were paying back over 50% of it.

To be honest it never occurred to me to save it or set it aside even when I could have afforded to do so. I always considered it to be a contribution to the parents to the cost of raising a child.

Ours goes into the everyday pot. Dd costs a lot (and it’s getting more as she gets older, not less!). But both DH and I have regular savings as well and we will likely be in a position to give or very flexibly lend DD sums towards Uni fees, car, contribution to house deposit etc in the future.

We ended ours ..it went into the family pot
If I hadn't needed it..I might have saved it and used it for extras for the children...music lesson or swimming maybe

@Sassanacs

I don't get CB because my husband earns over the threshold. Fair enough.

What really pisses me off is that households with two ppl earning right up to the threshold still get it. People in these circs do not need CB - period.

That is grossly unfair.

I think an urgent review is needed on this benefit with the threshold applied to the household, not per taxpayer.

Totally pisses me off too. I've got a colleague who has a joint income of £90k and they can still get the full amount.

The system is pretty broken.

For many years we needed the Child Benefit for groceries etc as we weren't very well off. However, as things improved, I decided to put the equivalent of CB into an account for our DS.

He had it when he was 18 - and very pleased he was too!

Just depends what you can afford.

The current system is ridiculous. Having a situation where a single parent on 61k isn't eligible but a two parent household on more could well be does nothing for legitimacy.

Personally i think they should just restore it so everyone gets it like the old days.

Goes into the pot in my house but have tried to see If I can save it by adjusting outgoings. I expect/plan that the CB will be converted to pocket money for dc when the teen years come. I manage to save in other ways and put in to a junior isa for her anyway, so swings and roundabouts.

BarbaraofSeville the administration of UC and TC is hugely expensive, highly incompetent and actually a barrier to people who need it most.

An easy-to-claim universal benefit is much more efficient and cheaper to provide.

Some months it’s saved for the kids (into their accounts I transfer the money) other months it’s spent depending on how tight money has been.

With Dh on furlough we have been spending it to keep afloat. Our food bill jumped from £80-90 a week to £150-160 a week.

This month it will go on school uniform. Next month I will be back up to full wages as will Dh so it will probably be saved.

I’m not overly worried about savings for the kids as my dad has set the children accounts up and puts money into them each month, all Christmas and Birthday money goes directly into the accounts as well. Kids have more savings than me and Dh at the moment....

I don't get CB because my husband earns over the threshold. Fair enough.

What really pisses me off is that households with two ppl earning right up to the threshold still get it. People in these circs do not need CB - period.

That is grossly unfair.

And for single parents!

Obviously if a single parent is earning over the threshold then it makes sense that they shouldn't receive CB. But when a couple with potentially twice the earning power can bring in almost £60k more than a single parent who's ineligible on the grounds of means-testing and still receive (at least some) CB, it feels very unfair.