School holidays and the inflated prices - how do I continue savings?
School is almost out, and you are unsure how to manage your savings with the increased cost of living, childcare, and the holidays.
The cost of living is high across the globe, including in New Zealand, Italy, and the UK. The cost of living in the UK reached a 30-year peak recently. The contributors to this spike in the UK have been higher Energy, fuel, and food costs; if this is not challenging enough, retailers also cut back on seasonal discounts.
Households with single parents are one of the groups found to be more affected by the rise in the cost of living, with their savings being roughly 20 times less than the average UK savings, according to an analysis by Labour, which referred to the Office of National Statistics figures on wealth in the UK. In addition, their findings revealed that one-parent households with dependent children had £400 in savings during April 2008-March 2020, compared with other homes that had £8,000.
However, the cost-of-living crisis has put a substantial strain on households around the UK, with 90% stating that the soar in their living costs has been exacerbated by higher fuel and food prices. Single parents with children reliant on them had the ‘lowest average net worth’ compared to every other group (Thomas, T,2022). In second place came single parents who have children who were not dependent on them at £1,700.
Notably, a difference was seen in savings in households where both partners are over state pension age and childless, as they have the most savings, at £59,600. The analysis also showed how women were facing a more significant financial turmoil due to a lack of savings and because 90% of single-parent families are women.
According to the Guardian, Joeli Brearley, the founder of Pregnant Then Screwed, revealed that a recent study conducted on 27,000 parents found that three quarters (73%) of single parents stated that the cost of their children’s childcare was the same or more than their rent or mortgage, which ensued in more than 53%, single parents saying that they would skip meals or go without heating and fuel to cover the cost of childcare.
Furthermore, according to Sky, more than one in 10 people have reported skipping meals due to rising food prices, with 16% saying they consume fewer home-cooked meals. A third of people claimed to use less hot water because of the soar in energy prices. 11% skipped meals, 8% prioritised meals for their relatives over themselves, and 3% used a foodbank.
Households have dealt with the challenges differently, with 57% of households spending less on essentials, borrowing money from family and friends, taking out loans and credit cards, accessing savings or overdrafts or selling items. The previous year in May 2021, 38% of respondents had reported the same.
As possible remedies to mitigate the gravity of the situation, Labour has suggested an emergency budget to be carried forward, with guidelines including a windfall tax, discounts on business rates and an inquiry by the National Crime Agency into potential taxpayer money lost to fraud. These are the suggestions by the Labour on what the government should do but what could you do to carry on saving through both the increased cost of living and the school holidays.
How to cut back and continue to save:
Are you on a low income? Why not apply for a tax credit or universal credit
Both working tax credit and universal credit consider childcare, as the government gives you additional money for childcare under these two schemes.
To be eligible for a working tax credit, you and your partner should work a minimum of 16 hours a week if you are in a relationship. One of you can be unemployed if you are entitled to a careers allowance, are in prison or hospital, or cannot work for other health reasons.
The amount paid towards your childcare is up to 70% of your childcare, a maximum of £175 per week for one child or £300 for two or more children.
Universal Credit is replacing other benefits such as tax credits, which means that if you are already on Universal Credit, you will not be able to apply for tax credits, and the childcare will be added to your overall payment.
Universal credit can cover 85% of your childcare expenses, a maximum of £646 per month for one child or £1,108 for two or more children.
Look for low-cost or free holiday activities
There are free summer activities that your children could participate in; the Coram Family and Childcare, have a list of organisations in your local area and have details on childcare and family services. There are usually youth groups and community centres offering help during the holidays.
The local council might also have activities for children during school holidays. Their website may have a list of activities for you to view. There are also holiday camps that start at £30 per day, such as Super Camps and Activate Camps, though this may not be affordable for all parents.
Seek Flexible work alternatives
Not every employer will demand that you work from the office, especially since the pandemic; as many employers had to allow their staff to work from home, and some decided to make it a more permanent move to work remotely as they discovered their jobs could be done either almost entirely from home or entirely from home.
You may be able to adjust your working hours, which could work around your partners and split the parental responsibility this way, saving you money on childcare. Or you could ask your employer if you can work a few days a week from home, though it is worth noting that some employers may expect you to have childcare in place during work hours.
Your other options include working part-time, term-time or doing a job share. The ideal option will depend on your income, how much you need childcare, and what your employer is willing to agree on.
Look into England for Everyone Fund
England for Everyone fund will enable families who have not gone on holidays for four years or more to go on short breaks from Monday to Friday or over a weekend from Friday to Monday; each voyage is worth a maximum of £450; this includes accommodation, with allowance towards travel and food.
Holidays can be booked for preschool-age children or during the school holidays before 5th June, such as the February half term, Easter holidays and Jubilee bank holiday for families with a minimum of one minor under 18.
How it works:
The family Holiday Charity works alongside registered referrers to choose families who would most benefit from a holiday.
The family holiday charity assists families in spending time away together; a lot of the time, this is the first time these families get a chance to go away. The charity supports families facing difficult situations through short breaks and holidays. The families that qualify are those on low incomes and families going through bereavement, domestic abuse or additional caring responsibilities, or those with a long-term illness or disability.
Conduct research on schemes and discounts
If you don’t seek, you will never know if you could be saving through schemes and discounts, so search on websites such as the government site for your eligibility for projects and discounts or contact advice services such as Citizen’s advice bureau.
Apply a saving strategy within the budget plan
Apply a saving strategy within your budget to pay yourself first; it is crucial to prioritise your saving strategy as it is a human tendency to overspend; leaving saving as the last thing on the list can lead to inconsistent saving. The budget plans usually contain the strategy for spending; however, if you include the saving strategy within the budget, you will have a plan covering both spending and saving. Adjust your budget plan when something changes; for instance, when the kids are on holiday, adjust this so that you can save but still tree the kids.
Make sure you are getting the best rates on your savings
Compare interest rates on apps such as Intellisaving, which will show you the highest interest rates per saving category, such as Cash ISA and Easy Access Saving accounts. Or call different banks or financial institutes to find out what rates they offer on saving accounts.
Download a savings app that tracks your saving accounts
IntelliSaving is an innovative money-saving app that integrates multiple saving and Isa accounts to one platform. Keeping a closer eye on your accounts in one place is beneficial in more ways than one. It will also enable you to spot fraud quicker to raise with your bank. IntelliSaving can be used as part of your journey to meet your saving goals by using the app to track the savings and ISA accounts throughout the year to see how far you are from reaching your goal.
Intellisaving’s app features have a personalised portfolio that summarises your finances, such as deposits, withdrawals and returns. Intellisaving also shows the best saving rates on both its app and website.
Intellisaving created the application to include all saver’s needs as they want every person to have the ability to save; therefore, several Money-saving tips have been put together that cover a range of challenges that savers may face, such as saving when you have children ‘Higher energy costs and how they are putting a strain on lower-income households’ or are on a tight budget ‘How should you continue your saving journey as a single mum.’
The cost of living affects every household differently, and as mentioned previously in the article, families with young children are among those struggling the most due to having more mouths to feed and higher energy and food costs. And when children are out of school, the costs can mount up even more as parents have to find creative ways of entertaining their children with activities and providing them with adequate food and childcare as they do not have access to school meals and after school clubs during the holidays.
Furthermore, the government needs to do more to help the most vulnerable families fight the curb of high inflation as some households are already sacrificing food and heat to help them pay for other costs such as childcare.
The increased strain on budgets can leave people pulling their hair out, but we hope that some of our tips may come in handy during these trying times. Many have gone through difficult economic times and came out the other side. Remember that financial storms do not last forever, and better days will come, even if it may not seem like it at present.