Financial advice for Mums Post Reply

[anadelaquintana]

Dear Nappyvalley mums,

Financial advice for Mums: helping you protect your family and its finances

I wanted to provide you with some financial tips, which will be especially useful if you have taken extended leave after starting a family. Although just top-line advice, this should prove helpful and, of course, you can give me a call if you want to have a chat about your personal circumstances.


Many of you may have stopped working outside the home after having your children. This probably means that you not only stopped receiving a salary but also employee benefits. However, you may want to continue some of these benefits privately as your need for them probably remains:


Pensions:
The Basic State Pension is currently a maximum of approx. £440 a month. The State Second Pension from your previous employment’s national insurance contributions, will top this pension up. However, the level will depend on the number of years contributed and your salary in each year. You may want to top this pension with your own private pension. The main advantage of private pensions for non salaried people is the fact that you automatically get a boost of 20% even if you don't pay taxes. If you don't receive a salary this tax rebate is limited to contributions up to £2,880 per annum. The 20% rebate is automatically added to your fund by the pension provider and you don't need to do anything to get it. So if you contributed £160, the provider will automatically top this up by £40.

Life Assurance:
A very important benefit to continue. You may have a number of roles including : mother, housekeeper, personal shopper, chef...(we all know the list is endless). If something happened to you, it could be very expensive to pay somebody else to fulfil some of these roles on your behalf.
Your Life Assurance could help your family financially at a traumatic time. Your Life Assurance Policy would be a tax free sum that could be put into a trust and you could also leave instructions on how the money should be spent. Term Life assurance, to age 65 for a woman aged 35 is quite affordable. £500,000 sum assured could cost you as little as £29 per month and give you great peace of mind.

Critical Illness Insurance:
It is often bought in combination with Life Assurance and it pays the sum assured in the event of a life threatening illness such as cancer, heart attack, etc... It is not cheap and it is normally recommended for people whose illness would put their family under serious financial strain.

Health Insurance:
This could become more necessary as government cuts start taking effect.

ISAs and Investments: Finally, just remind you that the best tax-reducing tool for a working man is his non-salaried wife. As a couple, you should make the most of your non salaried spouse personal allowance and lower tax rate band, by switching some of your husband assets into your name so that any income and capital gains are taxed at your lower tax rate or not taxed at all. Also, you should always try to use, if possible, your annual ISA allowance.

I hope you found this short guide helpful. If you would like some personal financial advice, then call me today.

Ana de la Quintana DipPFS

 

[kiwimummy]

What about those of us mums who are the main earner?

[anadelaquintana]

Dear Kiwimummy,

Thanks for your question about situations in which the Mum is the main earner in the household. Those mums that are the main earner should also, of course, look at their financial situation.

They should pay attention to their pension, specially if they are higher rate tax payers. Pension contributions up to £50,000pa are tax deductible, so if they contribute, let's say £300 pm, they will receive £120 in tax relief. A no brainer. They should first check if their employer offers a pension. It they do, they should join immediately. If they don't, they can call me and I can help them set up their own personal pension and create their investment strategy and selection of funds.

They should also check with work whether they offer life assurance, critical illness cover and private health. If they don't I would be very happy to help them in those areas.

Finally, as with non-salaried women, they should make the most of their husband lower tax rate by putting some of their assets, specially those providing an income or subject to capital gains tax, such as buy-to-lets, in his name so that they save as much tax as possible. This is a brief overview and requires detail advice. Please give me a call if you want to discuss.

Both spouses, regardless of their income, should try and use their annual ISA allowance and capital gains allowance if possible.

I hope you find this helpful. Please give me a call if you wish to have a more detail chat over the phone. I am here to help.

Best Regards,

Ana