Three in five (58%) families take on debt during maternity leave to cope with the drop in household income
One in two mothers (50%) are forced to return to work because they can’t afford to stay at home and 14% return purely to pay off their debts
Over a quarter of families (28%) are having children later than planned, waiting on average three years longer than planned. One in six (18%) say this was because they could not afford to have children any sooner
But despite waiting, household incomes still drop 30% to £2,181 during maternity leave – £537 less than the minimum amount needed to make ends meet
To maintain a basic standard of living for their children, three in five (58%) families take on an average debt of £2,012 during maternity leave.
On 5th April, the government’s Shared Parental Leave laws come into effect meaning that working parents whose babies are born on or after this date can apply to share up to 50 weeks of maternity leave. The new rules are aimed at offering parents greater flexibility in how they care for their children in their first year and research from Uswitch.com, the price comparison and switching service, reveals many parents are struggling to cope financially during maternity leave.
Commenting on how parents tackle this latest change to their finances, Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “The impact on household income will be a key consideration for parents thinking about applying for shared parental leave. Our research shows that the drop in income maternity leave causes can be crippling for families. The new legislation has the potential to alleviate some of the difficulties, but parents will need to carefully weigh up the financial implications.
“Although there is still work to be done to ease the strain on new parents, families can help themselves by taking a good look at their own household budget to see where it’s possible to cut costs, no matter how small. Starting to put money aside as soon as possible is the best course of action – whether this is cutting back on coffees or the cost of household bills. Turning to short-term debt solutions may seem an efficient way to fund spending, but they can also lead to long-term debt if not managed properly. Switching providers and managing expenses is a more effective approach and can make a big difference to the bottom line at the end of the month.”
For more information visit www.Uswitch.com or call 0800 093 06 07
Katherine Moss
Phone: 020 3021 5893
Email: katherine.moss@uswitch.com
Twitter: @uswitchPR
Opinium Research conducted an online survey of 1,006 UK mothers who have taken maternity leave and have child(ren) under age 4 between 11th – 17th July 2014.
Three in five (58%) respondents took on debt during their latest maternity leave. Of these, the average debt taken on was £2,012.
50% of respondents couldn’t afford to stay at home so had to return to work / start work
14% of respondents returned to work because they were in debt.
Just over a quarter (28%) of respondents had their youngest child later than planned. On average, this was 3 years later than planned.
When asked why they had their child later than planned, about a fifth said they had other priorities before starting a family (20%), or that they could not afford to have children any sooner (18%). One in seven (14%) chose to focus on other things instead like their career.
All respondents who had their youngest child later than planned (277 respondents) were asked to estimate their household’s average monthly income (after taxes and other deductions) before and during maternity leave with their youngest child. On average, this was £3,121 and £2,181 respectively.
All respondents with a partner (822 respondents) were asked what they thought the minimum monthly income (after taxes) their household would require to allow one parent to stay at home was. The average given was £2,718.
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