UK: Living Now, Planning For The Future. A Checklist For The Single Parent (Oneup Magazine)

Last Updated: 31 January 2012
Article by Boyes Turner

More children in Britain live in single parent families than almost anywhere else in Europe, according to a recent survey. A survey of 162,000 children living in 35 countries, carried out by the World Health Organisation, found that around 17% of British families are lone parent. The proportion of children born outside marriage in the UK has grown from 12% in 1980 to 42% in 2004.

Single parents have to do twice as much financial planning as a couple with children. Having a young family limits earning capacity or creates the burden of costly childcare which in turn eats into earnings. How can life be made easier for you, as a single parent, and your family?

A quick checklist can help you plan for the future financial security of your family:

  • Are you getting enough child maintenance? As a parent with childcare responsibilities, the non-resident parent (NRP) has a responsibility to support the child you had together. The basic Child Support calculation is now much simpler. Unless they are getting an income of less than £200 per week or on state benefits, the NRP is obliged to pay a fixed percentage of their income (after tax, national insurance and pension contributions) regardless of the income received by the parent looking after the child: 15% for one child, 20% for two, 25% for three or more. This figure is modified if your child stays at least one night per week with the NRP or if they have other children under the age of 18. Check you are receiving the right amount at the CSA website. If you are not then contact the CSA.
  • Are you receiving all the benefits you might be entitled to? The Department of Work and Pensions is a good starting point but no substitute for a benefits health check carried out by your local CAB, or benefits advice centre.
  • Are you paying the full amount of Council Tax when you shouldn't be? Discounts are available where there is only one adult at home or if you are disabled or have a disabled person living with you.
  • Are you getting the relevant Tax Credits? Until recently this could be checked online. Now you will need to contact HM Revenue & Customs on 0845 3003909. The helpline is open seven days a week from 8am to 8pm.
  • Are you able to get top up CSA maintenance or get school fees paid? In England and Wales you can apply for a top up if the NRP earns over £2000 net per week. The courts retain jurisdiction to make a maintenance order to cover education or training or indeed to cover expenses attributable to a child's disability.
  • If I am divorcing what orders can the court make? The law depends on where you live in the UK. In England & Wales the courts can make lump sum awards, order sale or transfer of property, split pensions and award spousal maintenance. Whilst financial matters are being resolved, the matrimonial courts can make interim maintenance orders and these can include provision for legal fees. There is no such thing as "palimony", maintenance in unmarried cases for the former cohabitee.
  • Even if unmarried are you able to get a capital award from the court? Yes. The courts can make orders for a lump sum but only to meet the needs of a child, in addition to child support maintenance. This may include a whole range of expenses until the child becomes independent or reaches 18 or ceases higher education. Courts should recognise the responsibility of, and often sacrifices made by, the primary carer of the child. The carer should have control of a budget that reflects their position and that of the other parent, both social and financial.
  • If you are receiving maintenance you should get your ex-partner to take out a life insurance policy (using a family income benefit policy) to provide for the continuation of maintenance if they die.

It is also important to consider the following points in planning for the financial security of your family should the worst happen:

  • Do you have a will? In your will you can appoint executors whom you trust to deal with the administration of your estate. They will then take on the role of trustees to ensure that your estate is looked after until your children reach the age at which they will be able to access their inheritance. This is 18 by law but you can specify a later age at which they can inherit such as 21 and 25.
  • Have you appointed trustees? Trustees have wide powers to ensure that your estate funds are wisely invested so the inheritance grows over the years to provide financial support to your children while they are still at school or in higher education.
  • Would your dependants benefit from you appointing guardians? In some cases yes. You can appoint guardians to look after your children while they are under 18. If you chose to do so, think about how they will access funds in your estate for your children's care. One way of doing this is to appoint guardians as executors.
  • Have you written a letter of wishes? You can deal with specific details about the upbringing of your children by writing a letter of wishes which is kept with your will.
  • Do you have an Enduring Power of Attorney (EPA)? An EPA will ensure that somebody whom you trust is instructed to take over the running of your finances should you become mentally incapacitated.
  • What financial protection do you have in place? This should be put in place to ensure your children can be looked after financially if you die.
  • Do you have life cover? If you are working you must put in place life cover to pay off any mortgage and to provide a fund for the guardians to take on the care of your children while they are under 18.
  • Do you have critical illness cover? This is also essential to ensure a lump sum to keep you and the family going financially if you are unlucky enough to fall seriously ill.
  • Do you have income protection? This is also very important and ensures an income stream coming into the household if you cannot work because of serious illness.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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