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Money tips for single parents

When a relationship ends in separation, divorce or the death of a partner, money can become one of your biggest worries. Here’s how to do the sums – and find help - when you are on your own.

Single parent money issues

Single parents make up more than one third of UK households and tend to be on a low income, says money education charity, Credit Action, so managing your money is crucial to avoid sinking into debt.

“The emotions involved in losing a loved one or in the breakdown of a relationship are obviously extremely intense,” says the Director of  Credit Action, Chris Tapp. “However, it is vital that people give some thought to their financial affairs to ensure that their situation isn’t made even more difficult by money stresses”.

Trying to sort out financial practicalities by yourself can be very difficult, so enlisting friends and family can make a huge difference. There is also information and advice available from a whole range of charities and other organisations. The important thing is to ask for help when you need it – not when it’s already become a huge problem. By communicating and keeping everything in order at an early stage, you can prevent an awful lot of pain and hassle later.

Here are some tips to help you keep control of your single parent cashflow:

Claim your credits and benefits

Find out how much you can claim in working tax credit and child tax credit:

  1. Get in touch with HM Revenue & Customs to find out how much you are entitled to. Don’t forget to let them know you have a change of circumstances; you get a supplement for being a single parent in a one-income household. London single mum, Kate Eaton says, “The credits I got were more substantial than I thought they would be, so it’s worth doing.”
  2. If you and your partner are no longer living together, you can apply for child maintenance. Find out more from the Child Support Agency website.
  3. If you are raising a family alone, help is available. You may be able to claim income support and get additional help with housing and health costs. Find out more from your local Citizen’s Advice Bureau, or DirectGov.
  4. Contact your local council to find out whether you can claim for Council Tax benefit as a single parent. Your council will also tell you if you are eligible for Housing benefit. You can download a claim form from the Department of Work and Pensions. They also have a “Benefits Advisor” service which can help you see what you’re entitled to.
  5. Budgeting loans are available to some people on a low income to help with certain important costs. Find out more by visiting the Directgov website and type ldquo;budgeting loan” into the search box.
  6. If you can’t meet your family’s short term needs, urgent financial help is sometimes available in the form of Crisis Loans. Again, find out more at Directgov.

Mortgage and rent

If you own a property jointly with your ex-partner, things can get complicated. Ask about your rights as soon as possible - a solicitor or your local Citizen’s Advice Bureau can help. Also:

  1. If you are struggling to pay your mortgage, don’t panic but don’t bury your head in the sand either. Contact your mortgage provider as soon as you think you might have trouble meeting payments. Get advice from one of the many debt-counselling services out there, or Citizen’s Advice, and prioritise your mortgage payments above all others in the meantime.
  2. The Government’s Mortgage Rescue Scheme helps prevent people losing their homes through repossession. For more information and to find out if you are eligible, go to Directgov.
  3. If you claim income support and are a homeowner you could get additional support for mortgage interest (SMI) which covers interest on the first £200,000 of your home loan. For more details, visit Jobcentreplus via the Directgov website.
  4. If you are on benefits or have a low income, you may be able to claim housing benefit to help pay your rent. Visit Directgov to apply and get more information from charities such as Shelter.

Draw up a new monthly budget

If you don’t already do this, now’s a good time to start. It sounds basic, but will help keep you in control of your cash now that your circumstances have changed. List your income and outgoings so you can prioritise what to pay and what to cut back on. Try the MAS budgeting and baby calculator to help you get started or the Child Support Options calculator.

Save on your bills

Switch to cheaper utility and mobile phone bills and shop around for cheaper insurance. Use online comparison services such as uSwitch to help you save money every month on essential bills.

Child Maintenance

Many parents worry about making sure that there’s enough money for the things their child needs, especially if they’re separated or bringing up a child alone.

For separated parents, arranging child maintenance is an important part of making sure that there’s enough money to meet your child’s needs. Many parents arrange child maintenance between themselves by working out a family-based arrangement but if you can’t find a way to work together, you can still use the Child Support Agency (CSA). For more information about child maintenance, visit the Child Maintenance Options website.

Regular, reliable, child maintenance can make a real difference to a child’s well-being, helping towards their everyday living costs and making a significant difference to their quality of life.

It doesn’t always have to be about one partner exchanging money with the other – child maintenance can include paying for things like clothes or school trips, which can help just as much. It can also help to boost a child’s self esteem and help them to have positive future relationships with both parents. 

If you’re not sure where to turn for information about child maintenance, you can contact Child Maintenance Options. It’s an impartial service, available by phone, web and face-to-face, that can help you to understand child maintenance and make an informed choice. Child Maintenance Options will help you to sort things out yourself through a family-based arrangement. Or, if you can’t do that, they can explain the options that are available through the CSA or the courts.

Whilst some separations are amicable, many separating parents experience conflict that can get in the way of setting up a child maintenance arrangement.

It’s natural to find it tough to work through these issues, but Child Maintenance Options is there to help. As well as giving you practical child maintenance support, they can also put you in touch with other specialist organisations that are there to help you with the range of issues that you might be facing when you’re separating or if you’re already parenting apart. You’ll also find handy calculators on their website which will help you calculate what maintenance is due to you; there’s also a budgetting calculator which will help you make your income stretch to cover all your family’s needs.

Importance of saving

If money is tight you may think you can’t afford to save, but putting away even a small amount each week can make all the difference when it comes to Christmas, holidays and treats for your children. Open an easy access savings account for yourself and a separate savings account for your child. Consider setting up a direct debit so that money comes out as soon as you have been paid – you will soon adjust to the new amount as you build funds for the future.

Importance of making a will

If you haven’t already made a will, you may wish to consider it now that your circumstances have changed. There are sound financial reasons for making a will – find out more here.

Say no to pester power

You’ll feel especially protective of your children if their mum or dad is no longer around. But don’t feel guilty and give in if they demand the latest gear and gadgets that you can’t afford.

This could be a good time to start teaching them about the value of money and saving: get them to think about what they’d really like or make a list and then save for what they want most from any pocket money or money gifts from relatives. Kids often want what they see in ads on children’s TV channels, so cut back on how much time they spend watching these if necessary.

Instead of expensive gifts, try and make time for low cost or free ‘treats’, such as regular trips to a fun play park or indoor play zone, going swimming, visiting free, child-friendly museums or simply playing a board game or snuggling up and watching a dvd together – recent Bounty research revealed that kids value time with their parent/s more than expensive toys or days out.

IMPORTANT NOTE: this feature is for guidance only and is not intended to be a substitute for professional financial advice.

Contact Details

Child Benefit helpline 0845 302 1444

Tax Credit Helpline 0845 300 3900

Child Maintenance Options 0800 988 0988 www.cmoptions.org

Child Support Agency (CSA) 08457 133133 www.csa.gov.uk

Citizens’Advice Bureau 08444 111 444 (England) 0844 477 2020 (Wales) www.citizensadvice.org.uk 5p per minute from landline, more from mobiles

Direct Gov www.direct.gov.uk/en

Department of Work and Pensions www.dwp.gov.uk

Shelter 0808 800 4444 www.shelter.org.uk

Credit Action 0207 380 3390 www.creditaction.org.uk