- 64% of mums would increase the income tax personal allowance
- 75% of mums support the idea of child benefit eligibility being based on combined earnings of both parents in a household
- Mums face an extra £7bn on everyday essential costs in 2012
Ahead of the Chancellor's Budget next Wednesday, the second UK Mums' Budget* from Family Investments reveals that family friendly tax breaks are top of mums' agendas as they face an extra £7bn** on everyday essential costs in 2012. It also revealed their attitudes to the proposed changes on child benefit, with an overwhelming 75 per cent supporting the idea of child benefit being based on the combined earnings of both parents in a household, rather than just one, as Government proposals currently online.
Asked what they would do if they were Chancellor for the day, the top five responses were:
Increase the income tax personal allowance to £10,000 (64 per cent)
Provide incentives for employers to provide better provision for flexible working for both parents (51 per cent)
Remove VAT from child essentials e.g. carry cots, child car seats, prams and pushchairs (47 per cent)
Introduce tax breaks for married couples (45 per cent)
Make child benefit exempt from the proposed £26,000 a year cap on benefits (34 per cent)
The focus on family friendly tax breaks is no surprise given the difficult economic constraints families are currently facing, with mums increasingly having to budget more carefully in order to keep their family’s finances in order and to cover everyday essentials. As an illustration of the challenges parents are facing, mums tell us that on average they are spending £40.72 per month more on utilities, £35.97 more on groceries and £32.04 more on transport compared to 2011. Combined, this means that the UK’s families will be spending £7bn more on these essential costs in 2012 than they did last year.
Kate Moore, Head of Savings and Investments at Brighton-based Family Investments said: “Our second Mums’ Budget shows that mums are still under huge financial pressure as families continue to struggle with every day costs. The fact that they would implement family friendly tax breaks is an example of the concerns and pressures mums have when it comes to handling their family’s finances.”
As in 2011, the UK Mum’s Budget research shows that, second only to concerns about paying for utility bills, 45% of mums are worried about not being able to save as much as they would like, or even anything at all. Almost half of mums across the country (48 per cent) will be reducing family savings by an average of £354.12 over the next year. This means a total of £1.3bn will be cut from household savings as families struggle to meet the escalating cost of everyday essentials. Parents are also increasingly having to cut back on saving for their children’s futures, with just over one in four mums cutting long term savings for their children compared to one in five in 2011. Over the coming year, this equates to an average annual reduction of £109.44 in children’s long-term savings; an 86% increase on 2011.
Pensions have also been hit with over a million mums (16 per cent) cutting their monthly pension contributions this year by an average of £121.20.
Commenting on the difficult savings options mums face, Kate Moore said: “Under pressure from rising costs, mums are having to prioritise today’s needs at the expense of longer term financial plans. Cutting their children’s savings is a particularly difficult decision for parents, as we know this is always bottom of their list of ways to save money. Mums are clearly having to make very tough decisions acting as their family’s very own Chancellor.”
The Mums' Budget also revealed the following:
When compared to 2011:
- 50 per cent of mums are spending less on entertainment and leisure, by -£18.18 on average per month
- 40 per cent of mums are spending less on clothing, by -£4.90 on average per month
- 25 per cent of mums are paying more on their mortgage or rent, by £34.79 on average per month
- 27 per cent of mums are paying more on books and uniform for their children, by £10.33 on average per month
- £39 per cent of mums also support increasing the Child Benefit threshold from £42,315.
* The Mums Budget is based on a Populus survey of 1,000 mums of under-18s across Great Britain. Polling took place between 21st and 27th February 2012.
** All extrapolations are based on ONS data which shows there are 7.47 million mums with dependent children in the UK. Figures are derived from 2010 Labour Force Survey (a household survey).