May 29

How to run a family for half price

Reading Time: 9 mins

Updated 12/9/13

There’s free money to be had when you have a baby and start to run a family. It’s just as well because you need all the bargains, cut-price deals, cheap offers and other financial help with the cost of bringing up children. Here are tips on how to have a great family life on half your salary.

Grab yourself some free money

The first thing to go for when you’re strapped for cash and running a family is to make the most of any benefits available to you.

£500 Sure Start Maternity Grant

If you are receiving income-related benefits or tax credits you will qualify for a maternity grant worth £500 for your first birth. This one-off payment is yours to keep, so you won’t have to pay it back and it is designed to help you buy all the items needed for your new baby.

You can apply for a Sure Start Maternity Grant by completing claim pack SF100 (Sure Start). To get a claim pack, contact Jobcentre Plus or you can download a copy from the Department for Work and Pensions (DWP) website. You can apply from 11 weeks before the week the baby is due until three months after the birth. You should return your completed claim pack to Jobcentre Plus.

Get more info from the GOV.UK.

£20 per week in Child Benefit

Next there’s making sure you are set up and ready to claim your Child Benefit, which is worth £20.30 per week for your first child and £13.40 for each younger child. You will get Child Benefit if you are responsible for a child, and satisfy certain other criteria. You should be able to get Child Benefit if your child is:

  • aged under 16
  • aged between 16 and 19 (up to 20 in some cases) and is in education or training that qualifies for Child Benefit
  • 16 or 17 years old and has recently left education or training – however, they must have registered for work or training with the careers service or Connexions, Ministry of Defence, Department for Employment and Learning (in Northern Ireland) or an Education and Library Board (in Northern Ireland)

Child Benefit can be paid into any bank, building society, or National Savings & Investments (NS&I) account that accepts Direct Payment and is usually paid every four weeks. It can be paid weekly if you receive Income Support, Income-based Jobseeker’s Allowance, income related Employment and Support Allowance or if you are a single parent.

The High Income Child Benefit charge was introduced on 7 January 2013. If you, or your partner have an individual income of more than £50,000 and one of you is entitled to get Child Benefits you may be liable to this new tax charge. To find out if you might be affected and what you need to do click here.

Remember that even if you don’t need this lovely cash bonus each week, you could use it to invest for your children. In fact it would be a great thing to add to their Child Trust Fund.

Check it all out at your local benefits office or find out more on the HMRC website here.

£3,235 a year in Child Tax Credit

You should also see if you’re entitled to child tax credits. These depend on your annual income and are composed of two parts:

  • The first is the ‘family element’, worth up to £545 per year and is paid to any family with at least one child.
  • The other is the ‘child element’, worth up to £2,690 and is paid to each child in the family.

The good thing is that you don’t need to have a very low income to get some help so there’s a very good chance you’ll get something. Do claim as soon as you are able to because amounts can only be backdated for up to three months. Payments will go directly into your account.

If you need more help you can call the Tax Credit Helpline on 02890 538192 – this is also the number you need to call to order a tax credits claim pack. Be sure to have your National Insurance number to hand when you call.

Beware, though. There have been many mistakes made by HMRC with tax credits and it’s possible that you could be overpaid or underpaid. Do check and re-check the amounts with your local office to prevent them demanding a load of it back a year later!

National Insurance credits

Don’t forget that while you are off work to look after your little one you will get National Insurance credits which will count towards your State Pension. You now only need 30 years of National Insurance credits to qualify for the full State Pension (I say full – it’s only about £5,000 a year now – who can live on that? But that’s another story).

Other benefits

Unfortunately, Britain’s benefits system can be quite complicated – so much so that many people are unaware of some of the benefits they are legally entitled to. In fact, more than eight billion pounds worth of benefits and tax credits go unclaimed each year. Help is at hand though, in the form of Turn2Us.

This website automatically works out whether you’re eligible for any benefits – it covers all the major government schemes. All you have to do is enter some details (such as how much you earn, your council tax rate, any savings you have) and see what you’re entitled to.

Then there are other ways to get free money

Make money with credit cards and bank accounts
run a familyIf your credit rating is good enough (check what it is with a FREE 30-day trial via CreditExpert) banks will offer you some impressive incentives. (It’s important to make sure your credit rating is good enough before applying – if it isn’t and you get rejected, you’ll find it harder to get approved for other cards, mobile phone contracts, and mortgages). If your credit rating is good enough, consider doing the following:

Option 1: You can get up to 3% cashback on your spending by switching to Santander’s 123 current account. This account gives you 3% interest on balances from £3,000 and a free arranged overdraft for four months.

Option 2: TheReward Current Account from Halifax will give you £100 just for switching to it, plus £5 every month when you pay in at least £1,000. You can also access an arranged overdraft up to (but not including) £2,000 costing £1 per day.

Option 3: Use a cashback credit card and make money whilst you shop. The most generous one on the market is the Capital One Aspire World MasterCard which pays 5% cashback for the first three months up to a maximum of £100 cashback earned. After that the rates are tiered up to 1.25% cashback, depending on how much you spend.

Find old savings accounts, pensions and legacies

Head to, which will search for any dormant accounts you think you might have forgotten about. You might uncover an old building society account that your Granny set up. Or, if you’ve moved around a lot you could easily have lost details of old accounts.

There may be other financial products you’re missing out on…read our article on how to get free money which has more links to services like the Pension Service which will find old pensions you might have had with a job you left years ago – and the Unclaimed Assets Register which covers all manner of investments, life policies, shares, National Savings and others.

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Cutting essential monthly bills to the bone

Step one: Switch your bills
run a familySwitch energy suppliers – if you’ve never switched before you can cut your annual energy bills by as much as £538 by switching (for free) through our comparison service.

Lots of people are paying far too much for their broadband. You could save hundreds of pounds a year by bundling your TV, phone and broadband services and getting them all from one provider. Or, just make sure you have the best broadband package within your budget. Some of the packages on the market can be complicated so find out what you should be looking for in our broadband guide.

You should also make sure you’re not paying over the odds on any insurance products. Competition is stiff so there’s a good chance you can grab yourself a great deal. For example you could save as much as £319 simply by switching to Churchill Car Insurance according to a Consumer Intelligence report.

There are so many other ways to cut costs – see some of the easiest here or head straight to our comparison pages.

Step two: Get out of debt
run a familyDealing with debt isn’t always as scary as it sounds – it’s about taking control and facing up to the situation at hand. Ignoring it isn’t the answer and there is plenty of free help available – from the debt pages here on Moneymagpie to debt services such as the CAB or StepChange.

Simple steps such as setting up a spending diary to see exactly where you’re money will make a big difference. You’d be surprised how much money you could save by cutting out the odd coffee or bringing your own lunch to work.

Once you have an idea of where you can potentially make cuts, it’s time to do a budget – we show you how here. A budget is the foundation and starting point of a richer life for you and your family.

Now it’s time to cut the cost of your borrowing. If you’ve been borrowing on credit cards cut back on your monthly interest by transferring the balance to a card with the lowest possible rate. If you can, get a credit card with a 0% interest deal. It might be worth paying a handling fee (usually around 3%) and transferring your balance for the interest-free period to give yourself a payment break. Check our article on the best 0% credit cards for more info and the current best deals.

Read our guide to getting out of debt for a step-by-step rundown of what to do next.

Step three: Get paid for everything!

Once you’ve got to grips with your debt you can focus your attention on getting rewarded for your good behaviour. Shopping cashback sites and loyalty cards are a good place to start.

Some of the most popular retail loyalty cards are the Tesco Clubcard (remember not to spend points in store because they are worth four times more online) and the Boots Advantage Card which offers a very generous 4 points for every £1 spent. And don’t forget you can now collect advantage card points from loads of online shops – through Treat Street.
run a familyOr take things a step further and get a credit card that offers rewards. You can collect loyalty points with a credit card such as the popular John Lewis and Waitrose partnership MasterCard which gives you one point per £1 spent in John Lewis and Waitrose. You also earn one point per £2 when you spend anywhere else. Every 500 points are worth £5, which you get as vouchers to spend in John Lewis or Waitrose.

There are plenty of travel freebies up for grabs with reward cards too – everything from free flights to deals on Eurostar tickets. Read all about them here.

Eat, sleep, dress and laugh for half the price

Running a family seems to be one long spend-fest. However, you can live well on half the price if you’re clever. Here are some ideas.

  • Don’t buy loads of new baby clothes. As you know, baby clothes are so short lived, you’re constantly replacing them. So go for second-hand, charity shops, swap shops with friends and any hand-me-downs you can get your hands on. Baby won’t mind a bit.
  • Don’t go crazy on accessories. You don’t need a baby bath. Midwives say that an ordinary washing-up bowl will do for the first year of the baby’s life. So long as they can fit comfortably, that will do. Again, go for second-hand equipment too (apart from car seats and some prams, which need to be top condition). But toys, playthings, cots blankets etc – they’re all just as good used – then you can sell them again afterwards to get some cash back.
  • Get as much as you can for free. Use toy libraries, join CixResearch which sends out toiletries for adults, babies and children for you to test out and report on – it’s free and often quite good. Have holidays by swapping houses with other people who have babies – the NCT has a house swap service and it’s great because the people you’re swapping with will have some equipment already and you won’t have to take so much with you.

Save for your children’s future


Change your view of money (and that of your kids)

  • By saving now and investing for your children’s future (and your own) you’re doing them more good than you would by spending all your money and on toys, gifts and goods that they’ll soon outgrow.
  • It’s always worth putting spending in perspective. No amount of expensive gifts and posh holidays can come close to the value of your day-to-day love, interest and care you dedicate to your child.
  • Set boundaries – don’t spend what you don’t have, even if the children are insisting that ‘everyone else has got one’.
  • Keep children’s time in front of the TV to a minimum – adverts are designed to encourage them to encourage you to spend money.
  • If your children are a little older, join the great pocket money debate here and have your say.


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Tesco Clubcard vouchers are now only worth 3 times more when traded in for their Tokens; not 4 times as stated.


There is a big error in the section “£190 Health in Pregnancy grant (HiP)

This is a lovely one-off payment of £190 that goes to any pregnant woman who is at least 25 months pregnant.”

Woman are only pregnant for 9 months so would never get this as it says you have to be at least 25 months pregnant


Good point – thanks so much! Oh dear – I’ve put that back to weeks now!

Mrs Williams
Mrs Williams

Read it today (5th March 2010) and it still says 25 months pregnant.

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