Hi, myself and partner have recently entered a joint iva with my partner
The problem is we are thinking of trying for our first baby. I have raised the issue with my IP but they seem reluctant to want to advise what would happen financially- e.g. would the IVA fail based on our potential new income/expenditure?
My partner and I work full time, and our joint income is around £44,000 before tax etc.
Because of this, I dont think we'd get any help with childcare- and after maternity leave we would still both need to work full time.
Is childcare taken into consideration as a necessary expense? Without my full time income, it would severely affect our available income.
I'm just so confused- I cant find much information online about ''allowances'' for the cost of a new baby.
Salary sacrifice is one option I'd looked at for childcare help, but I dont know how this would affect our IVA
And without all the answers I'm scared to make the decision- because of my partners job, we just cannot risk the IVA failing and potentially having to go bankrupt
Firstly, please don't put your life on hold because of your IVA.
Secondly, whilst I hope it happens quickly, you have no idea how long it would take to conceive so your IVA may have gone a fair way before any little one came along.
Your IP won't be able to give you much advice at the moment as it is all academic and would be dealt with at the time.
You need to sit down with your partner and work out some potential figures and if the situation arises, you can then inform your IP and then work something out.
Good luck!!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
As for figures, we had a similar joint income and did get the Child care allowance in Tax Credits (nothing else). Of course, it all depends on relative costs and incomes, but in the first year we got about 70% of nursery fees paid for us. This reduces from year 2 on. By the time we entered the IVA we were getting about half of the fees paid and the other half were allowed in our expenses for IVA.
Salary sacrifice will only work to your advantage, generally, if you are not getting any government assistance with fees at all. There are online calculators at the main voucher provider's sites.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Let us know how things go Kathryn, the forum is always here for advice and support at anytime.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Foggy, you don't get anything now with tax credits on that income, the maximum for just tax credits without the child care element is household income of £42k pa and that's going to be reduced to £36k, we lost ours just before entering our IVA.
Catherine, you will get your child allowance which is about £80 a month for your first child. On your income, that would be about all you would get. Childcare vouchers through salary sacrifice schemes are good, they are deducted from your salary at source before you get taxed and then you can use them for childcare at a participating nursery, but just to put it into perspective, nursery fees are on average around £50 a day (my local one is anyway) so that soon mounts up over a month.
as regards the information your IP can give you, I guess it depends if your IVA was approved on a minimum dividend which is dependent on your current income, if so, then you would need to arrange a variation meeting when and if the time arises that your circumstances change. Childcare allowances are allowed for in an IVA as they are a necessary expense and are what they are. But forgive me for asking this, as you say you are only recently in your IVA, did you not consider discussing starting a family prior to taking on the IVA and how this may affect things? I agree you should not put your life on hold for the next five years but perhaps it was something you both needed to have looked at before you took on the IVA.
I don't agree that this is something they should necessarily have looked at before starting an IVA - who knows how our feelings and circumstances change? Whether or not to start a family would not have been something I considered when desperate to sort my finances out.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I disagree Jan, when you are taking on something as huge as an IVA that is going to affect your life for the next 5 years, I would be thinking of every eventuality and how we would possibly cope, this is why we took our time taking this step as we wanted to ensure that whatever happens, we would be able to manage our IVA and reduce the risk of it failing, I accept nobody knows what the future holds but some things can be planned for
When we took on our IVA we gave no thought to the future. We are now faced with the prospect of hubby going from incapacity benefit to state pension which will make a hell of a difference in our income.
We perhaps should have realised this, but it never crossed our minds. It was known about before we started but neither of us thought about the consequences a couple of years down the line.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I never imagined that hubby would be the last employee at his workplace or thought about daughter going to uni next year but through all this I'm still going and she'll go to uni and we'll muddle through the final year of my IVA...some things can be planned and factored in other things just happen. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Lem makes very good points, in that it is important to take a long-term view at the outset of an IVA - but often there are things that happen to all of us which cannot be predicted, and that is where IPs need to be available to assist their clients.
Never ever put your lives on hold just because of an IVA. Many of my clients have had children during the term of the IVA, and generally with a bit of juggling they always manage to muddle through. The joy of being blessed with children is priceless, but of course it is a very sensible approach to be thinking of the costs and the impact on the family budget at an early stage.
It is true that if everyone waited until they really could afford children that we would never have them! You also never know how long it will take, for me it was the 2nd month for number one and found out number 2 was due when our first was just 5 months old - so it can happen pretty much instantly!
You won't get tax credits on that income but you will get child benefit and many employers offer childcare vouchers for child care. It is horrendously expensive to use childcare -especially for babies and under 2's as they are charged on a higher rate. The figure of £50 a day quoted is about what it is where I am. I left work and became a full time mum when I had my first, number two followed VERY quickly and we worked out if I had worked then all my salary would have gone on having two under 2s in childcare the whole time. No point in that really!
It is a tricky one, I know how rewarding raising children is, but would I have started a family now, in an IVA? I would have to answer 'no'. I know how tough it has been for us!
