About Maternity Pay?(55 Posts)
So the baby broodiness has hit me hard recently. I'm still relatively young to start worrying about this and I never thought I'd be the type to start pining after a child but nonetheless it's the only thing I can think about!
I've obviously discussed this with my OH and he's worried about timings and costings. We have mortgage payments to make and although both of our wages have increased since we originally bought our house our spending has increased in line with this - we were frightfully frugal for the first year.
He would also like to get milestones like marriage and next job out the way and house renovations. An extravagant wedding is not something either of us are fussed about but to invite the families the expenditure would wipe out our savings.
To put his mind at ease I was doing the maths on how much I would be bringing in if I was on maternity. I want to make sure we wouldn't be in major difficulty or put too much strain on our savings.
The amount I'm entitled to came to £665 a month. I currently get paid nearly triple that after tax! How is that not going to put a strain on us and how are we expected to manage?
I know that your replies will probably be that we'll find a way to make it work but I'm worried about the logistics of it. There honestly isn't much we can cut back on and do I need to pay tax and does the cheque come in weekly or monthly instalments does it come from work or hmrc? Too many questions!!
I'm AhemExcuseMe, I've name changed because I'm new and didn't like the last one.
In answer to most of your concerns I have looked into childcare. The only local fee information I can find is two thirds of my wages, this means I'd only be contributing half of what I currently do to the household and would leave me with no spending money. This is a worry in itself but we do have other options we can explore - DP's mum is a CM.
Thinking about it I know IABU, I had just been doing the maths and there was no way I could spin it to make it more appealing, this then disappointed me because then it's going to be even harder to convince my OH that now is the right time to start trying. Probably because it isn't the right time; no matter how much I want it to be
I didn't really plan a second maternity leave when I had my first DC. If you go back part-time then SMP will be based on a smaller wage for DC2. I didn't have much of my savings left after the first maternity leave and had quite a bit less income to replenish them when planning DC2. It's worth considering if you're planning ahead.
And to go back to the OP, no it's not unreasonable that maternity pay doesn't match your income while you're working. That would be completely unaffordable if someone were being paid to cover your job and you were also being paid the same rate.
IMO the situation re: maternity and paternity entitlements is about right. Maternity leave is now very long (52 weeks if you want it) and transferable leave between the parents is a massive step forwards. Maternity pay will mean tightening your belts and saving beforehand for many, but it seems reasonable to me. Now childcare costs on the other hand i think are exorbitant and I think there should be more help for them, not just for those on relatively low incomes. As with many things I think those who earn just over the thresholds are hit hardest. If you don't earn much you get subsidies, if you earn loads you're probably ok, but middle earners do have a tough time
But maternity pay- no, I can't see what you feel is unreasonable about it.
If you are seriously saying you can't cut back anywhere to be able to set aside money for maternity leave, then how on earth will you manage after maternity leave when you have the additional several hundred pounds a month childcare costs? I don't want to rain on your parade , but for someone who is clearly wanting to plan this is detail, you seem to be ignoring the really expensive time which is when you go back to work. Many childcare providers insist on payment all year round: our nursery was fabulous but it was full pay 51 weeks a year, only shut for one week over Christmas. Some childminders may do a half pay retainer for times you're not using them but basically , expect childcare to be your biggest expense
The maternity leave itself is doable; if needs be, go back to work sooner, many women do.
It was only 3 months anyway when I had my first baby. With the second I could had another 3 months ( unpaid in those days!) but couldn't afford that
I do get where you're coming from OP because if you earn above the thresholds for any help with childcare etc then it can be tough. But that's how it used to be for all of us ( even for those on relatively low incomes ). We had to scrimp and save before kids, and then had a very lean time while they were pre- school, even having to remortgage to afford childcare. You need to look long term though. We're fine now our children are teenagers, and it's definitely been worth if long term to keep my career going. I think you just need to be very honest with eachother that having children IS a big financial drain.
I'm not sure where your £665 comes from . SMP is about £136 pw for 33 weeks and 90% of amount earned in specific weeks before baby is due for first 6 . Plus Child Benefit at about £20pw You employer may top this up with its own discretionary scheme but here may be strings attached. Try not view it as such a loss. Between you you would still have an income of over 2k after tax , presumably near 4k atm. Yes you might have to save now for alter and become more frugal again and prioritise your expenditure but that level of income should be ok for a while.
I agree that I had more disposable income on maternity leave than when working full time and paying for childcare....
We had a mortgage holiday with our two. We took 9 months off with dd and having a year with ds. It'll increase the monthly payments after but only by about £30. Then we put the excess maternity and dh's excess money into savings (what there was).
I would research how much childcare costs in your area. where I live a full time nursery place with cost you £1400 per month. If you live in an area with similar fees you will actually be worse off when you return to work than you would be on maternity leave. also what will you do if you have twins?
We saved up for maternity leave both times to accommodate loss of income (only got SMP). But you do need to think beyond maternity leave. Unless you are going back full time and have free child-care available full- time, you will need to find a way to live on less.
I have gone down to 4 days a week and pay for a childminder for 25 hrs a week (£4 an hour) and that has cost me at its worst when I had 2 children not a school, £1600 a month (2x £500 for childminder on a 5 week month and £600 loss of wages). Actually, after childcare vouchers probably more like £1450.
When we bought our house, we deliberately didn't borrow to the max as we knew we would want to have children and would have a lower income.
Your dp is thinking and planning ahead which is a good thing
Are you saving now? We saved a lot prechildren and used that to cover the loss of income when I was on maternity leave. But it's the childcare cost that are the killer, we have 3 DC, 2 at school and our childcare costs are higher than our mortgage.
Do you want to be put off? It's not just the financial costs, your body will never be the same again, your career will at best be at a standstill during the baby years.
Hahaha at maternity leave being a holiday.
I'm a nurse. I just went back to 14.5 hour shifts for a rest [ wink]
You will cope though. I was clearing over 2k a month and that got halved on maternity leave, you just cut your cloth accordingly and your priorities change. I used to spend a lot on clothes, nights/ meals out, holidays, travel to work etc.
Now I don't, and it's not because I can't as much as I don't want to. At all. Would much rather take DD to the park than go for afternoon cocktails.
DH and I also got married for a grand total of £500 last week. We had an amazing day.
Basically what I'm trying to say is, things are only as expensive as you make them. Apart from childcare. That's always bloody expensive!
Eh? You're currently being paid about £1900 per month, your partner presumably similar, and you can't cut back any more to save for mat leave? Is your mortgage really huge? I'm on less (about 1/3) than that with two kids and only earner/adult in the household, admittedly my mortgage is small but we could live on a lot less if I wasn't paying childcare and petrol to work- I think you need to look more realistically at your spending if you seriously want children soon tbh.
I'm dreading going back to work, I will be £150 worse off a month than on mat leave. Luckily I could ask for more hours as only work part time, plus 3 of the 4 days childcare will be covered by family.
Can't imagine what it would have been like had I still been in my FT, high earning role, coming down to earth with a bang!
YOu just do it though. If it wasn't doable, there'd be nobody having children
and sales of wine would be zero
I am probably being shallow, disingenuous or naive but can you not get promotion, pay rise or job move before getting pregnant. This is what happened to me (or I made it happen) just before I planned my pregnancy so I never got used to living on the higher salary - I just banked the difference to cover ML.
Or can your partner not look at his career plan and income to see how it can increase? Assuming he is money-oriented I would also hope he is ambitious.
I know this is much easier said than done but there are two ways of budgeting a) stopping money going out and b) getting more money in.
It sounds crazy, but you just manage. I earn a good six times what I get in maternity pay. We saved saved saved but unfortunately due to one reason or other managed to decimate our savings so are now surviving on dh wage and my mat pay. Yes we shop at aldi and don't go out as much (but honestly who does with a newborn), but it's not really a struggle at all. Makes me wonder how I managed to spend the extra 2/3 grand a bloody month that we had coming in! We did buy an awful lot of nappies, wipes and clothes whilst I was pregnant so the only outgoing for ds has been formula. We also dropped a car, I walk everywhere with ds in pram and dh uses car for work. It's much easier to find ways to save when you HAVE to.
We took a mortgage break for a year when I was on ML.
I have found it harder once back to work to cope, nursery fees, not having time to hunt for bargains, travelling costs. We are always skint and we've just found out we are having another baby. We must be mental.
Maternity leave is basically a long holiday that you can only take if you can afford it
Look, for most people, children means reduced disposable income. It's just how it is. You can save and plan ahead in your situation.
My one piece of advice would be to look at the cost of childcare and how it compares to your income. My mat leave is just coming to an end and, as you say, we've managed. BUT... if I were to use childcare when I go back, once travel costs are added in then I would actually be paying more to return to work than to stay at home. Seriously, childcare costs are a real eye opener.
It doesn't matter how much you have available for maternity leave as whatever you do have will end up in the same place - just arrange with your bank to have 1/3 paid directly to Tesco, 1/3 directly to Mothercare and the rest directly to your nearest bf friendly cafe at the start of each month ;-)
I know this is terrible whataboutery, but here in the US I am facing a maternity leave consisting of a maximum of 12 weeks off work with an income of 0 dollars. Yes, zero. There is no maternity pay of any kind in many states in the US. And there is no right to more than three months off for the mother plus three months for the father (and that's providing they qualify for family leave, not all do). I'm not pregnant yet (trying hard) but I'm sure when I am I will be dreaming of 1000 dollars a month in maternity pay. Oh and since my husband's a full time students, our household income will be 0 during my maternity leave. And I have no entitlement to benefits either. But this is definitely the greatest country on earth!
If it comes to it you'll just have to take less time off. I'd love to have a year off but we can't make it work financially on SMP only so I'll be back at work part time by time baby is ten weeks and full time by 5 months. Am not looking forward to it but you do what you need to - we decided to get pregnant so I need to take responsibility and do what is best for the family as a whole, even though it will be very hard.
Don't forget child benefit.
And you will save money on travel to work.
Rotter Lol at "luxury item"
Thanks for the replies all, mumaa I found yours really helpful.
I'm probably going overboard considering I'm not even pregnant
Like others have said, most save up for maternity leave. SMP is paid now for far longer than it used to be but obviously employers cant be expected to cover the employers true salary for nine months as its just not fair.
Its going back to work after you have to take into account. Childcare costs, another person to clothe and feed, hobbies, school trips etc.
You'll get plenty saying babies cost nothing but they do. Very wise to financially plan.
And just to piss on your chips a bit more actually it doesn't get much easier after the baby years. Wrap around before / after school club is eye watering and they have loooong holidays to cover plus clubs and hobbies and stuff. I thought we'd be better off once they were in school. We're not. Children are a luxury item
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