This month, we are looking at all things related to children and pregnancy. It’s a special time in your life, whether you are welcoming your own brood or some grandchildren. We consider budgets and the costs associated with having children.
In light of Wimbledon this month, we reflect on sports insurance for you and your children. We share some interesting information on setting up your own income protection if something were to happen to one of your children. Plus, we’ve looked at pregnancy health insurance cover, if you are looking for some extra support.
Before we get started, can you spare a second to answer our quick poll? Just hit reply to answer. Our questions:
- Do you feel like you have enough support in place with your mortgage while raising your children? Yes/ No
- Do you have a budget in place for maternity leave or raising your kids? Yes/ No
- Is there anything we can help you with to get your finances in order? Yes (send through details)/ No
Let’s dive in.
Have you considered how maternity leave could impact your mortgage? We are here to help with our key strategies and tips.
You’ve got lots to plan and prepare for with the arrival of a bundle of joy. Let us take the stress out of your mortgage worries as we clear up a few things.
The Impact of Maternity Leave on Your Mortgage
Firstly, it’s to be expected that your income is likely to take a dip during maternity leave. Most people go on maternity leave with some paid leave from their employer or with statutory maternity pay.
But, this is unlikely to match your full salary.
The key question is how will you keep up with mortgage payments?
It could be worth checking with your lender upfront. Most are used to dealing with maternity leave situations.
We asked around in the office and they suggested the following tips to help manage finances during this time:
- Save extra funds before going on leave
- Check if you're eligible for government benefits or employer-sponsored top-ups
- Prepare a document outlining your return-to-work plan
- Calculate your post-leave budget and stick to it
- Ensure potential lenders know about any financial assistance you'll receive
- Build up an emergency fund in advance for peace of mind
- Speak to your mortgage lender about payment holidays or flexible repayment options
- See if you qualify for a mortgage with built-in payment breaks
It’s always best to keep your lender in the loop with any changes. Communication is key, helping you navigate unexpected turns and potentially keeping you ahead of any financial downturns. Let’s answer some key questions you may have…
Can I reduce my mortgage payments while on maternity leave?
You can discuss temporary payment reduction with your lender. It's important to approach them early and explain your situation to see what arrangements might be possible.
Is loan modification an option during maternity leave?
Loan modification is worth exploring. It can adjust your loan terms to make your payments more manageable during and after your maternity leave.
Can I refinance my mortgage during maternity leave?
Refinancing your mortgage during maternity leave may be challenging due to reduced income. But it's not impossible. You'll need to demonstrate a strong credit history and possibly have a co-signer.
Is it possible to rent out part of my property to manage mortgage payments?
Renting out a portion of your property can generate extra income. Assisting with mortgage payments during maternity leave. However, this must be agreed to by the mortgage lender. Most, if not all, lenders will insist upon authorising any form of sub-letting. You will need to discuss this with your mortgage lender.
What are the common pitfalls to avoid when managing my mortgage during maternity leave?
Common pitfalls include waiting too long to speak to your lender. Not exploring all available options. And failing to consider the long-term financial impact of any changes to your mortgage.
Navigating your mortgage during maternity leave shouldn’t be daunting. Contact us for easy-to-understand options. Leaving you to embrace the joys of parenthood!
Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. You may be charged a fee for mortgage advice.
Recent research from MetLife UK shows a large gap in income protection. Over half of working parents don’t have a financial plan in place if their child experiences illness or injury.
The research shares that 50% of parents wouldn’t be able to survive longer than three weeks without pay if they had to take time off work to care for their sick child(ren). Just 22% would last seven days, and 9% are unable to consider any time off.
There are lots of reasons why it’s so important to have income protection. Though it’s not nice to think about, you don’t want to be caught out. Say you need to take time off work to care for them. Do you have enough sick pay in place? 48% of all working parents admitted that they don’t have a savings pot set aside in case they need to take unpaid time off work or away from their business in the future.
Have you considered expensive medical bills, such as special equipment or modifications to your home? You might also need to cover extensive travel costs and hire help at home. 26% of working fathers and 30% of mothers are without any childcare support should they need it in an emergency.
What about job security? If you need to take several months off, will your job still be there?
Of course, affordability is the leading factor in parents not taking out protection policies. But also, not understanding (or wanting to understand) what’s available. We get it. You never want to think about harm coming to your children…
However, in insurance, we are always wanting to look after our clients first (that’s you!). So, we can do the hard (and uncomfortable) work for you and create a bespoke policy.
Rich Horner, Head of Individual Protection at MetLife UK, said: “For many, particularly those who must take time off unpaid, self-employed workers, or those on zero-hour contracts, [taking leave] could have a severe financial impact.”
It’s important we raise awareness and accessibility together. As MetLife shares, they paid over 6,200 claims for children. ChildShield was launched in August 2023. It sets out to “complement” traditional protection products, enhancing family cover in hopes of closing the protection gap.
Get in touch to discuss your options!
We asked our clients to submit a question, and we’ll answer them. (Remember to get in touch for detailed and personalised information.)
Our first grandchild is joining the family in a few months. Can I use equity release to help them prepare for the future?
Congratulations on the upcoming addition to your family! Equity release can be a way to access value tied up in your home, helping you provide financial support for your grandchild.
Wouldn’t it be nice to have the funds to help with your own retirement needs and support your loved ones financially?
Traditionally, we leave the nest egg we’ve carefully built up, passing along property after we die. However, with more people living longer, it’s becoming increasingly common to help your loved ones. Sooner rather than later.
For example, say your children are having to look for property further away to afford a home of their own. Then you heard about equity release.
A lifetime mortgage could help unlock £££ from the value of your home, helping your family get on the property ladder and keep the family nearby. It can also free up other costs associated with having a baby, like buying cots, car seats, prams, etc.
Let’s take a closer look at the benefits of a lifetime mortgage:
- You can unlock cash from your home, tax-free, to help meet your needs in later life.
- You’ll always retain full ownership of your home and can stay in it for as long as you wish
- You can choose to make reduced or no monthly repayments to suit your circumstances
- You’ll never owe more than your home’s worth with a lifetime mortgage
- You may be able to remortgage your plan in the future to release further funds or secure a better interest rate, although this isn’t guaranteed and may be subject to early repayment charges
Now, the drawbacks:
- A lifetime mortgage is a loan secured against your home and subject to compound interest. Meaning the amount you owe can grow quickly
- Equity release will reduce the value of your estate. And may affect your entitlement to means-tested benefits
- Equity release may leave you with limited or no property equity remaining
- Equity release will reduce your financial options in the future
- A lifetime mortgage is a long-term financial product. It is not designed to be fully repaid until the death of the last remaining borrower; otherwise, early repayment charges may apply.
Is equity release right for you?
For homeowners aged 55 and over with a property worth £70,000+, it helps to release some of the tax-free cash from your property. However, it’s not right for everyone.
Factors to Consider
Releasing equity from your home will reduce the amount of inheritance you can pass on. It's important to discuss this with family members to ensure everyone understands the implications.
Lifetime mortgages can be a powerful tool for accessing the value of your home. But they require careful consideration. Use professional advice to ensure they are the right choice for your circumstances.
Chat with us today to see how we can help!
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice. A fee may be charged for mortgage advice. The exact amount will depend on your circumstances.
We often get asked, ‘Does my child need health insurance?’ We can’t answer this question for you, as this is something you need to think about. But we’ve put together this blog post to help you understand what’s available. Don’t forget, we can offer detailed information to help you make that decision — reach out directly for a bespoke quote.
As a parent, if your child becomes ill, you would do anything to help them feel better. This includes trying to make sure they feel better as quickly as possible – the right health insurance cover can help you achieve this.
In the UK, NHS waiting times continue to increase, and treatment options are becoming more restricted. If your family has health insurance, you’ll be covered if someone unexpectedly falls ill – once diagnosed, you’ll have access to a range of treatments without long waiting times. You’ll have more choice and flexibility, which can help reduce stress if something was to happen.
Many insurance providers have plans designed to be more suitable for children.
Here are some things to think about when looking for a quote:
- Hospital expense allowance
If your child is admitted to hospital, you’ll receive a reimbursement of the costs per night. You’ll receive a hospital list - outlining the hospitals you’re covered for.
- Access to a Paediatric helpline
You’ll get support from a personal nurse adviser if your child is admitted to hospital, is diagnosed with a serious illness, or if you need help in arranging a second opinion.
- Unlimited use of a confidential GP helpline
Open 24hrs a day, 7 days a week. Unlimited video and phone consultations with a doctor/ fast text responses.
- Discounts through the online health and wellbeing site
Including dietary products and much more
- Choice of hospitals
- Member offers – including membership
- Access to the latest approved cancer drugs even If they aren’t available on the NHS
Perhaps you’re thinking of acquiring health insurance for the whole family? Look for family health insurance plan for discounts for everyone.
Finding the right health insurance for you, children or the whole family can be a time-consuming process.
Contact us today to get our team will do the hard work for you; by scanning the whole of the market in order to find you the best deal.
All ready for the tennis this month! Do you have your racquets and balls ready to go? What about insurance?
Have you thought of personal accident plans for your children? It’s not something you like to think about, but it’s on all parents’ minds. Whether it’s watching your little one save a goal, seeing them master the double flip on the balance bar, or perfecting their backhand without a ball to the head!
Adding a personal accident plan means you’ll have the best care available for your child, ensuring ultimate peace of mind and protection.
As we all know, the benefits of sports outweigh the risks. Getting children involved in sports is great for their development. It also teaches them about health and fitness. They’ll learn important life lessons along the way and form new friendship groups.
But with any physical activity, there is always an element of danger. While your club or school will be doing all they can to protect your child, accidents can still happen.
From broken bones to serious life-changing injuries, whenever your child is injured, it can disrupt family life and hit your pocket hard.
Hive’s new Personal Accident Plan pays lump sum benefits from a range of injuries – with premiums starting from £8.34 a month. It’s great value and an essential consideration for any parent with children who take part in organised sports. Most sports are covered, with the option to include motorsports, for fast and simple affordable cover.
While we are here, if you are an adult who plays sports, do you also have personal accident sports cover?
When you take part in sport, your body’s on the line and at risk of injury. And when an injury happens, it can cost you financially as well as physically. For instance, you may need some time off work to recover. You may also need help getting around. That’s not to mention the repairs to equipment that you need to pay for and the possibility of having to buy brand-new gear to replace anything that can’t be fixed.
The costs involved in a sports accident can be enough to put you off the sport altogether. But, taking out specific insurance can allow you to simply enjoy your sport, safe in the knowledge that if a serious accident takes place, you’ll get money to help with your costs.
Premiums start from as little as £20 a month.
Get in touch today to see if we can help you take out the most suitable policy for you.
Risk warning: Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. You may be charged a fee for mortgage advice.
We’d love to hear your thoughts on this topic. Did you have enough budget in place? Anything you would have bought more or less of?
Recent research says the average cost of having a child in the UK is around £223,256! That’s about £12,400 a year, or £1,030 a month.
Unsurprisingly, childcare makes up a large portion of this. Figures reveal parents are paying about £270 a week for 50 hours of full-time care for a child under two in England and Wales. But things are looking up, or rather, costs are going down. You may be able to reduce your bill by up to 20% by applying for tax-free childcare.
The government has recently increased the financial support for childcare for parents on universal credit by 47%. Jeremy Hunt’s 2023 budget also included plans to expand 30-hours free childcare to children aged between nine months and two years in England.
Primary school starts the September after the child turns four. Your childcare costs could drop to around £60 a week if you only need after-school care. But as your child gets older, you may also sign them up for music or sports classes, and there may be regular trips to the cinema or theatre.
Research suggests parents spend an average of £14,500 on enriching activities for their children between the ages of four and 18.
To get you started when waiting for your family to start, we look into the average costs of setting up for a baby. Don’t forget that many of the items on this list can be sourced second-hand or borrowed from friends. If you ask around, you’ll also receive the best tips on what you’ll need.
- A car seat. £100 – £200.
- Clothes – babies grow fast so don’t go overboard, but do make sure to get several onesies. Plus plenty of bed linen and muslins. £50 – £60
- Nappies – Tip! Buy in bulk. £12 – £24 in the first month
- Feeding – For breastfeeding, you’ll likely need specific clothes. Plus, maybe a breast-pump and a few bottles. Average cost: anywhere from £25 to £500. For bottle feeding, you’ll need formula milk, sterilising equipment, and bottles. £50 – £100 a month.
- Moses basket or cot. From £70.
- Baby bath. £10-£50
- Pram – A travel system including a car seat, carrycot, and pram may work out cheaper overall. £150 – £1,000
- Changing bag – You’ll need somewhere to put everything when you’re out. Look for lots of pockets! But a normal backpack or bag can work just as well. Around £25
- Play mat. Around £25
- Baby bouncer – Somewhere safe to put your baby while you go to the loo! Average cost: £20 – £300
- Changing mat. Around £7
- Baby monitor – you’ll probably need a monitor once your baby starts sleeping in his or her own room. See if any local mums have one they don’t use anymore hiding in a cupboard. £20 – £250
- Stair gates – once your baby starts crawling, you need to secure the stairs to prevent accidents. £15 – £50
- High chair. £30 – £300
Cost-Cutting Tips for Parents
While having a baby can be expensive, there are plenty of ways you can cut costs. Here are some top tips:
- Look out for special offers.
- If you earn under £60,000, apply for child benefit as soon as you can after the birth. You will probably get a leaflet about it at the hospital or when you register the birth.
- See if you can borrow items you will only need short term, such as stair gates, from friends.
- If you choose reusable nappies, check whether your local council offers a voucher that can go towards paying for them, or a free nappy kit.
- New mums are entitled to free prescriptions and dental care from the moment they become pregnant until their baby’s first birthday. So get your teeth checked before your baby turns one.
- Keep buying second-hand clothes – these are really handy for nursery, where your child will probably get covered in food and paint. Keep an eye out for second-hand toys too.
- Do babysitting swaps with local parents.
- Sell on anything you no longer need.
- Your local library can often be the best place to find free activities, as well as books and toys to borrow.
https://protectionreporter.co.uk/metlife-uk-reveals-over-half-of-working-parents-dont-have-a-protection-policy-for-their-kids.html & https://protectionreporter.co.uk/finance-news/metlife-finds-50-of-parents-wouldnt-survive-longer-than-three-weeks-without-pay-if-their-child-fell-ill.html?
https://hiveinsure.co.uk/individuals-couples-and-families/sports-accident-plan/
https://www.thetimes.com/money-mentor/income-budgeting/family-finance/starting-family-baby-costs
