To ask what you do with child benefit

[Gemma273]

Basically this.. so I've always since my DC has been born split it in half, half into savings account for DC, half into our account to cover clothes, shoes, activities etc for DC. This discussion recently came up at a toddler group I go to and everyone said they put it into savings and now I feel guilty that I split it.

So what do you do?

You can still claim it and then the higher earner pays it back using a self assessment tax return. Or you claim and opt out of payment to get the NI credits

Which, whilst being true, doesn’t negate my point in any way, does it?

If you’re from a poor family that actually needs the money then it’s all been spent, no savings account for you, just maximum student loans, more of a struggle to get on the property ladder. If you’re from a rich family you get a big fat savings pot which will cover uni fees or a decent chunk of your first house deposit.

It’s still wealth going to wealth.

We use a portion for the childrens swimming lessons, the rest gets put into a separate account (in my name) to only be used for anything that they need unexpectedly, new pushchair or car seats etc of the ones we have were to break. But isn't used for everyday things like clothes or food, if we couldn't afford to cloth or feed our kids we wouldn't have had them.

Wraparound

Nothing. It goes into family finances and is used as family money.

We have plenty of money, and don't save in the kids names at all. If I want to and am able to help them with uni fees/buying a car/buying a house etc when they're older then I will, but otherwise it will all remain in our names.

I have a friend who saved massive amounts in her kid's accounts, and then found herself struggling financially when the marriage broke down. Now can't afford to save into the kids accounts, so the older kid has twice as much as the younger kid, and the family can't afford to do nice things. Totally bonkers.

So are no households allowed to save any money they have left over. Ours goes in the general household pot to spend but we also save some of wages for our child’s future. What’s the difference?

Should we just have to break even to get the child benefit?

Whats the point in me furthering my career then?

Can’t she just share between them? Or take the money back for the whole family?

I don't put any of it into his savings! I've heard people say this do this as well. My parents never did this with me. Now wondering if I should do half and half..

As years have gone on different things.
Dd was born right in first credit crunch.

So it went to food /bills etc.

When dd about 10/11 I was able to start putting £10 aside for her every month, now she is a teen she has a few hundred to spend.
She put some towards a much needed laptop for secondary. She's v good and only spends a little.

I'm extremely grateful that she has that backup.

I do same for other dd as well. Just £10 a month early really adds up.

The bulk now goes on tutor's for dd2 as the state school isn't able to teach her properly.
It also goes into their fund for clothes/school trips.
Thankfully because I am now working and dh earns a little more I can sometimes save some which is hugely helpful. For instance there is a 500 school trip coming up dd is desperate to go on. She can because I've been able to save some CB up.

Just to add my parents didn’t have any money to save until we were adults and earning our own money so I’ll be damned if I’m not allowed to save a little bit of money for my own child.

People have said on there it’s wealth feeding wealth but we are not all filthy rich. Some of us are just both working full time jobs and cutting costs where we can (low mortgage and Aldi shops, second hand car etc).

This is just another scenario where we are pitted off against each other while the super rich don’t give a shit!

Its not a race to the bottom.

The reasons why it was decided to give child benefit to everyone regardless of income are that

1. it would actually cost more to means test it than to just give it to everyone,
2. it was one of the first ever benefits when the welfare state was created, and it was decided that higher-earning people should get some benefits from the welfare state too, so they don't feel like they're just working hard to pay for everyone else and getting nothing in return

3, as other people have touched on, originally child benefit was specifically paid to the mother rather than the father because research showed that too many husbands were drinking all the child benefit down the pub etc., whereas if it was paid to the mothers it was more likely to be spent on the children. So it was a sort of mitigation against what is now known as financial abuse, which can affect high-earning families too.

Bad .... saving is a brilliant thing if you can! Of course save!

It's been used everywhich way when DC growing up.
If the worst happens and we lose our jobs, I've got the peace of mind that both dc have some money for them saved up.
We can keep them updated for school/shoes/uniform/equipment/!! That's peace of mind!
It's absolutely bonkers to critise people for saving it.

You don't know what's around the corner!.eg dd 2 learning issue's! I never anticipated needing to spend hundreds on tutor's just to help her keep up??

I already put an amount in savings for our DC when I get paid which is more than half of the CB I get so the child benefit just does into my account and gets absorbed into the rest of my money going on whatever needs paying that month.

My kids are clothed, fed, do things throughout the month ect so I don't need to count out which part of the CB is spent on what, it just goes into the pot which 99% of gets spent in them anyway 🤣

Ours just goes into our household budget. Surely that's what it is for?

In other words - people who can afford to save can pass more to their children than people who can’t afford to save.

this is absolutely true and not about child benefit at all - you are right - the kids of parents who can save have more in their name than kids of parents who can’t.

“big fat savings pot” sounds incredibly resentful by the way - don’t forget that many who are saving aren’t extraordinary folk born with golden spoons in mouths. Many savers are penny clinchers and mixing a bit o luck with a bit of grind.

Ours goes into household money but we save £100 per month each for them separately.

When my kids were younger I had less money and I needed it for basic day to day things. Now they are older I save it for the family holiday

it doesn’t matter what it is used for if your children are cared and provided for.

it isn’t intended to be saved for their college fund so no need to feel guilty.

I think if it's being 'saved' it shouldn't be awarded to be honest.

Well thank you to whoever it was that decided this was necessary. its the only bit of money I get in my bank.

@AngeloMysterioso

family finances can change a lot in the 18+ years that people parent.

for many it is the case that they have less spare cash in the early days and need the money for basics but find as years go on they can save it for other things. It’s just people progressing through life and not necessarily wealth feeding wealth

the reverse is also true

100%

Also OP I work in banking and there are an awful lot of people who “save” their child benefit into an account for their kids but dip into regularly to pay for Xmas, holidays, bills or sometime even towards a deposit for their new house.

so don’t be embarrassed about or compare yourself to what other people say they do with the money, as there really is a wide range out there.

the main thing is that you and your child are happy and looked after and if you get to enjoy a few luxuries in life well all the better

@Pootle40

trust me when people say they save it, many many in fact actually have other debt credit cards or mortgages that they could/should direct the monies to, only they just have this pressure in their head to “save” the money for their child’s future. It’s often actually an illusion and they are just building debt somewhere else.
they still need the money, so I wouldn’t be too concerned about taking money off people. They just arrange their finances differently to you.

I use it to spend on the DC

Whatever they need eg clothes, shoes/school shoes & uniform (DC go to a state school so luckily can get most of it in Sainsbury's & Tesco!) when they were younger spent on nappies, formula etc

Never crossed my mind to save it, that would be a luxury to do that

Ours goes into DD1's savings (will now be split 50/50 between her and DD2) and then DH pays it back on his tax return.

If it wasn't going into their savings, I would be spending it on their clothes, gifts, etc and saving a similar amount per child per month anyway, so for those saying "if you're saving it you don't need it" it doesn't make that much of a difference in our case, and probably those in a similar situation.

And whether we claim it or not, does not affect anyone else in receipt, although I do agree it should be means tested