This article is the latest part of the Financial Times' financial education and inclusion campaign
International Women's Day should be a day for celebration, but as a financial journalist, I admit it's often a day tinged with dread. When it comes to women's finances and career prospects, how much has really changed for the better in the intervening twelve months?
Not soon enough, judging by the depressing headlines on Friday. For starters, MPs on the Commons Treasury Select Committee criticized “sexism in the City” against women working in finance – a scandal that the Financial Times’ courageous investigative team has been uncovering for years.
It's frustrating, although it makes me feel lucky to work with so many wonderful men (and women!) at the FT. We've got our work cut out for you this Budget Week covering what could be the Chancellor's last big financial statement before the next general election, and thankfully, there have been some positives for parents struggling with the high cost of childcare (more of that later).
However, analysis of tax cuts by think tank Women's Budget Group suggests that single men would receive on average nearly £500 more a year than single mothers, who are more likely to work in low-paid jobs and struggle to get by. To affordable child care. .
It is great that the Chancellor has allocated more funding to kick-start pioneering childcare reforms. But the sad truth is that this won't help everyone.
Flake feet
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“The UK’s childcare system simply does not work for low-income families,” was the frank assessment of Julie Brierley, founder of campaign group Pregnant Then Sacred, speaking at an International Women’s Day event organized by the newspaper’s Financial Education and Inclusion Campaign. Financial Times. She said that the proportion of income that these families need to spend on child care makes work uneconomic, which puts them in a cycle of poverty. If this government does not address the problem, it hopes that the next government will do so.
“If you don't have grandma daycare, there's no other option,” added Anna Whitehouse, the writer and broadcaster known as Mom Boca, pointing to data from SunLife that more than half of grandparents now care for their grandchildren during daycare. Work week.
Older women are more likely to receive unpaid care than older men, exacerbating the effects of the gender pay and pension gap that is never far from the conversation on International Women's Day.
Whitehouse is behind the #flexappeal campaign for flexible working for all. The possibilities this has opened up have been one of the biggest positives to emerge from the pandemic. However, doom is never far away – Boots is the latest company reported to have reversed flexible working policies.
“Weakening flexibility” is also an issue – it is important to stress that flexible working is not just limited to women (or fathers).
In our free-to-watch webinar, we tried hard to focus on the positives. Recruiters tell Whitehouse that if a company ends flexible work arrangements, they know it will be easier to entice their best talent to work for a company that does.
Other companies are touting the virtues of flexible working, including Deloitte, which has produced information packs it likens to Top Trump cards that show how its employees work flexibly, enabling new hires to ask about it during interviews.
Mike Currie, architect of Hargreaves Lansdowne's 'Financial Courage' campaign to encourage more women to invest, stressed that employers recognize the employee retention benefits such policies provide. It argues that investing in better childcare and flexible working will boost the UK economy.
Brierley added: “In the conversations I've had with ministers about childcare, I'm seeing a complete shift in the narrative.” “Five years ago, they were looking at me like I had two chocolate fingers up my nose – why should we care about childcare? Now, it is seen as the main battleground for the next election.
I felt those sentiments in Chancellor Jeremy Hunt's Budget speech on Wednesday. The Financial Times has reported on the distorting effects of the £50,000 threshold, where the abolition of child benefit begins, including parents working less or refusing to work overtime to avoid ridiculously high marginal tax rates while getting their benefits back.
By raising the threshold to £60,000 from 6 April and extending the phase-out to a cap of £80,000 for the highest earners, Hunt claimed the child benefit reforms would lead to an increase in working hours equivalent to around 10,000 extra people entering the workforce full-time. complete. .
However, if you are one of the nearly half a million families now entitled to claim something, there is a risk that hours of your time will be wasted fussing over the application.
In the spirit of positivity and collaboration, HMRC helped me clarify the following about the claims process.
Only one parent can apply for child benefit. If one partner is not working, they must be the partner, as they will then receive National Insurance credits for their state pension.
The quickest way to apply is using the HMRC application. But it would be wise to do so on or after the start of the new tax year, which is the date on which the new child benefit thresholds begin to apply. “It will not depend on the 2023-24 threshold,” HMRC confirms.
However, if you make a claim or sign up for payments before then, you may be exposed to a tax liability under the current system. This means you will have to complete a tax return next year to repay the excess.
Allow me one final groan. Promises to create a system where paid workers can repay excess benefits through their tax code are not yet ready – HMRC says “further details will be announced in due course”. So you may need to complete a tax return in future years.
The IRS uses your adjusted net income to determine how much your interest will be reduced. Simply put, this is your gross salary minus some tax credits and pension contributions (a detailed child benefit calculator is available here). This means that the higher-earning parent can take advantage of salary sacrifice to save more in their superannuation and retain more of their children's benefits.
The expanded threshold applies starting April 6, which is also the date child support payments increased. Parents will receive £25.60 a week for their first child and £16.95 for subsequent children – so, for a family with two children, this could amount to £2,212 a year.
I'd say it's worth it – and if you're juggling work and raising the next generation, I hope this makes your life a little easier.
Claire Barrett is consumer editor at the Financial Times and author of the Financial Times' Sort Your Financial Life newsletter series. claer.barrett@ft.com; Instagram @clairb.
FT Flic's True Cost of Childcare webinar can be watched free for 90 days if you register here.
