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Original poster

Child Benefit - how do you spend it?

94 replies

debster · 19/04/2004 10:52

I've been wondering how people spend their child benefit. Do you spend it just on your children, save it or spend it any which way? Our child benefit is paid into a separate account but isn't actually spent on the children exclusively. They do have their own savings accounts but this is for birthday/Xmas money. The child benefit usually goes towards our household expenses.

Whilst I appreciate the extra money we get I do also feel uncomfortable about whether we should receive it all. I think child benefit should be means tested especially after seeing a programme a few years ago which featured a middle class woman who saved her child benefit to buy a new piece of art every year. I would rather those who really need it get more than everyone getting the same.

What do others think/do?

OP posts:
tabitha · 19/04/2004 12:18

Mine goes into our current account and pays the bills. I definitely don't think it should be means tested as we probably wouldn't qualify for it but desparately need it, i.e. have reasonably good incomes (both work full time) but with 4 kids and extortionate childcare costs, every single penny counts. In saying that, I don't begrudge it to people who don't 'need' it but use it to save for their kids or to buy somehting for themselves, even. I'm just glad it's one of the few 'universal' benefits left.

hana · 19/04/2004 12:25

I opened a Smart to Save account for dd just after she was born, and it gets put in there each month, along with any money she gets for birthdays, etc. Would like to do the same with future children and top it up to the same level.
Although it isn't means tested - it's up to each family to apply for it......, so there's a thought I suppose........

DD currently has more money than we do in her account!

marialuisa · 19/04/2004 12:33

We claim the money, as not claiming it wouldn't actually benefit anyone except the govt. The money goes into our joint account but we pay £50 pcm into a policy for when she's 21 and the tenner over arguably covers any number of DD related expenses.

SoupDragon · 19/04/2004 12:35

Ours goes straight to our DSs accounts

lydialemon · 19/04/2004 12:35

It goes on family bills such as food....I'd love to be able to save it for the kids but like some other posters it is an essential part of our rather crappy income.

iota · 19/04/2004 12:37

Ours goes into our jpoint a/c.
We don't have accounts for the children, but they do have some premium bonds.

Hulababy · 19/04/2004 12:41

It is just swallowed up with everything else so no idea what it eactually pays for IYSWIM. I guess it goes towards bills, shopping, holidays, clothes - you name it, whatever we are spendning money on at the time.

Don't pay it straight to DD as we already have an account set up which we pay a set amount it each month (not as much as CB though) and her other money from grandparents, etc. goes into.

Not sure how I feel about the means testing - it'd be just another form of taxing us again then wouldn't it? And as Twinkie says (I think it was Twinkie) will eventually make it more expensive for middle income families to have children than lower income families.

Trouble is regardless of who you give it to there is no knowing whether it is goes to the child or not. I do know of one family (from growing up) where the mum went to get the CB and then spent the whole lot on cigarettes - I know this as I went with her sometimes as a friend's mum

BooMama · 19/04/2004 13:22

I wish I had been paying it into my childrens accounts... My child benefit and child tax credit is the only money I ever have in my bank account and is the only money I don't have to run past my husband before spending! Very antiquated but my husband is self employed and as we can never anticipate how much money there is from one month to another we have never set up a regular payment into my account. Subsequently he pays for all the big shopping bills and I end up having to ask for cash through the week. I hate this and therefore the child benefit is my saviour! Each month I tell myself that I will start paying it into the childrens accounts but it never happens...

BooMama · 19/04/2004 13:26

Having said that, looking back through my statements it all ends up going on toys and clothes for the children anyway. I would just like the security of them having a little nest egg when they are older as I have NO savings and find it very scary!

bossykate · 19/04/2004 13:34

hi prufrock, not sure yet what we will do. i am considering all the options you mention. will also need to find another vehicle for investment, as i can only have one equity isa at a time (despite recent changes, still worth it for the break on cgt i think).

have not had any further blinding insights on whether it should be means tested or not.

gold123 · 19/04/2004 13:44

Mine goes into a separate account and pays for my dd's ballet/tap lessons and ds swimming lessons, this month it paid for 2 new school uniforms and shoes. Without it, I would struggle to afford these items.

Galaxy · 19/04/2004 13:45

message withdrawn

gold123 · 19/04/2004 13:47

Boomama - my husband is self-employed too. It can be so stressful at times, not knowing from one week to the next how much you are going to earn, let alone if people actually pay up ! which has happended.

prufrock · 19/04/2004 13:50

Aren't you being a bit over optimistic about returns? (I lied further down - I have dd's going into a straight unit trust without the ISA wrapper) At current CB rates your total investment over 18 years is £15,444. If you designate the account into the childs name you can transfer it to them at 18 at original cost for CGT purposes. And even with great performance you should then be able to sell without a CGT liability over 2 years max by using their annual allowance.

hercules · 19/04/2004 13:52

I agree with whoever said it shouldnt be meanstested. If it was I'm sure we wouldnt get it but we do need it and couldnt manage with out it.

bossykate · 19/04/2004 14:02

probably! that could be a good solution for no2. however, the other issue is control - i want these savings in my name - i do not want automatic control passing to ds or dd at age 18.

fairydust · 19/04/2004 14:19

clothes -days out - toys that might help her development any thing left over goes into her account.

noddy5 · 19/04/2004 14:33

Ours just gets sallowed up with the rest of our bills etc.Ds has a savings account but mostly for birthday money etc

WSM · 19/04/2004 14:38

DD's goes into my bank account and gets spent on whatever, whenever. I'm a SAHM and get no other income/benefits so the monthly £60ish (?) pads out my account for anything - trips to tesco, days out etc.

eddm · 19/04/2004 15:31

The problem with means testing it that it is very, very expensive. The administrative costs are huge. Universal benefits are far simpler and cheaper as well as fairer ? no-one loses out because they are at the margins. They also help by ensuring as many people as possible feel they are participating in the welfare state ? that it does something for all of us, not just a 'Lady Bountiful' thing where those in receipt of benefits are always someone else, never 'us'.

geogteach · 19/04/2004 18:51

Mine pays for the cleaner. Not essential maybe but keeps me sane

KatieMac · 19/04/2004 18:53

For the first 3 years of getting it - it went on bills
For the next 2 years - it went of extras (ballet, swimming, Tumbletots, school uniform, etc)
Since starting Childminding it has gone into an account for her when she is older.....but it is in my name so if I need it desparatly I can get it

Davros · 19/04/2004 19:05

I spend it on therapy, activities and other resources for my autistic son. I have a separate account and also put in DLA, Carer's Allowance and any birthday money etc.

grumpyzebra · 19/04/2004 19:26

Ours is part of general household income, made the difference between us breaking even and losing £105/month out of savings over the last year or so.

bossykate · 19/04/2004 19:31

ds and dd has/will have an idiot for an investment mgr, i.e. me. i'd completely neglected to notice that you can have two mini equity isas - so no problem at all with that aspect of things. i am a f***t.