Maternity leave means debt for one third of new mums
Nearly a third of new mothers go into debt due to taking maternity leave, while one in 10 cuts short their time off to ease financial pressures, a survey suggests.
Some 28 per cent of those surveyed had gone into the red due to taking leave to have a baby and typically ran up almost £2,500 in debts, while just a quarter felt financially prepared for motherhood.
The survey, conducted by uSwitch.com, found 11 per cent of mothers said they had ended their maternity leave early to boost their ailing finances, while 9 per cent of the 1,000 women surveyed said they had been forced to reconsider plans not to return to work.
The mothers polled said their net monthly household income had dropped from £2,866 on average to £1,654 typically while they had been on maternity leave.
Individual circumstances vary and some companies’ maternity leave is more generous than others’ but for those who qualify, statutory maternity pay is paid at 90 per cent of the woman’s average gross weekly earnings with no upper limit for six weeks, and for the remaining 33 weeks at the lower of either the standard rate of £135.45, or 90 per cent of average gross weekly earnings.
Justine Roberts, CEO and co-founder of Mumsnet told Channel 4 News: “Statutory maternity pay at just over £100 a week after the first six weeks of maternity leave, represents a real pay cut for most women.
“This, coupled with inflated fuel and food prices and the VAT increase, mean that new mums are reporting feeling an exaggerated version of the pressures currently faced by most families.
“This government promised to be the most family friendly in Europe, as things stand it still has a long way to go.”
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Founder of the mothers’ online forum Netmums Siobhan Freegard agreed. She told Channel 4 News: “Almost every mum would like a proper maternity leave – but very few can afford it.
“Women are either being forced back to work far too early or are going into severe debt so they can spend time with their baby. That’s a sad reflection on what society values.”
Squeeze
One in 10 people questioned said they had borrowed cash from relatives, while 14 per cent had used credit cards, loans and overdrafts to help tide them over.
Families’ incomes have been squeezed by high inflation and soaring bills, at a time when people are seeing little return on their savings due to three years of record low interest rates.
A recent study from the Institute for Fiscal Studies (IFS) think tank found that families with children stand to lose £511 a year on average under tax and benefit changes which came into force this month.
Shadow chancellor Ed Balls previously said the impact calculated by the IFS was proof of a “tax credits bombshell”, with up to a million households losing eligibility entirely.
