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!!
It will be paid through your employers in the same way that your normal salary comes, monthly weekly etc.
SMP comes from your employer. You get the first 6 weeks at 90% of your salary.
Your two options are find a job that offers a good maternity package over SMP (eg. mine offers SMP+ 50% salary) and/or start saving some money to cover the shortfall.
Afaik the money will come as wages from work. Is it possible for you to put aside money now to save up a bit? You could also do a v cheap registry office wedding with v few guests.
One other thing to bear in mind though is the cost of working when you have children. Your family income will be reduced by the cost of childcare, which isn't cheap.
Most people save before or during pregnancy to cover the shortfall. Did include in your costings that you'd not be paying to travel to work? Or paying for lunch every day etc?
And it will be taxed.
Children are a blessing, but quite honestly they are also a life changer. Holidays, nights out, clothes.. Anything will be a distant memory.
If you're not both on the same page, I'd urge caution. Yep, your body clock is ticking but will waiting a few years hurt?
start saving now so that you can afford as much mat leave as possible.
I would go for very cheap wedding and save the money for a baby. The wedding is only a day.
same as everyone else does I expect
You save up so that you can afford to not be earning.
You aren't expected to manage and no one expects that it won't be hard. But no one is entitled to have children they can't afford.
I'm not sure what your AIBU question is?
YANBU to research the costs.
YABU if you expect to get full pay.
If you want to have children you need to save up and expect to be skint until they are about 30
Maternity leave is expensive, and going back to work is even more expensive with childcare to pay for.
You are right to be realistic about how much you need to save, or reduce your outgoings. Think years rather than months of cutting back.
We are expecting our first and were shocked when we worked everything out too OP.
I agree that the main cost with the baby is child care and/or loss of earnings. It is eye watering here (not UK), and I imagine it is in the UK too. Actual things for the baby (e.g. clothes, bed) can mostly be obtained cheaply.
I'm on SMP at the moment and have been since April, and it has been a shock seeing the reduced amount entering my bank each month, but we've managed. If this is a future plan start squirrelling away some money every month now to top up your reduced income when you need it. I didn't have any savings to depend on, but we were lucky that a couple of outgoings have finished recently which has helped. Also, I spent a small fortune on commuting to work every day - I now put only a couple of quid in my car every so often to get me and DS to the shops/baby play/park etc.
Things like holidays have temporarily been put on the back burner, and little things like the fact that I don't drink as much now that I have DS or indulge in fancy meals in/out as often saves a little each week.
My last 3 months maternity leave will be completely unpaid, I am desperately trying to scrape together the pennies to enjoy the final few months I'm entitled to with DS rather than having to go back to work.
Also, I second that some employers have good maternity leave packages, so it is worth looking at what your work offers. This can be a bit tricky without alerting everyone to your (vague) plans!
If time is on your side, leave it for a while. Set a date to revisit the idea if it makes you feel better. During that time you can get married (please don't have a baby unless you are married or have taken other steps to protect your financial position in the event of a split) and save up to supplement your maternity leave.
I dont understand how people are shocked. i really don't get it
I mean, they can't just salary match
most people do plan these things
Well NotYoMamma, if you've never looked into it before it can be a shock to realise your income will/may drop to zero. Maternity pay is spectacularly crap IMO.
I'm currently pregnant and thanks to my maternity package my wage will remain the same for the first 8 weeks. Then for the next 18 weeks it is half pay plus SMP which thankfully will only be a few hundred pounds under my normal pay anyway. After those 18 weeks I will get SMP only for 13 weeks. Any leave taken after this will be unpaid.
Me and Hubby anticipate that financially we won't actually be too affected until baby is 6 months old as this is when my SMP pay only will start. Ideally though I would like a full 12 months off.
Baby is due in 5 months and me and hubby are putting £300 a month away to cover maternity costs so that when SMP only comes into effect we will have about £3'000 put aside to cover the downfall.
It was basically the shock. I'm trying to set my partners mind at ease but he's money orientated and he'll see it as losing out. I don't expect to have my way paid for me but I naively assumed my package with work wouldn't be the bare minimum.
I do have the funds to keep me fed but it's now seeming to me that Maternity leave is basically a long holiday that you can only take if you can afford it. I don't want to leave myself with no financial safety net for after a baby if I've spent my monies on supporting myself.
I would have liked to take a year off but it seems that if it comes to it I'll have to return to work much earlier. It just makes me
I agree with those that say if you have time then maybe consider waiting until you and your DP are both emotionally and financially ready. Bringing a baby into the relationship does create a different dynamic and can be stressful (even in pregnancy). Why add the financial pressure/stress to that mix if you don't need to. As well as the decrease in household income, you need to consider the increase in household expenditure:
- Pre baby arrival, costs associated to everything the baby will need from prams, car seats, necessary furniture, clothes, bottles, sterilisers, baby food and the list goes on...
-Post baby, food, clothes, nappies, childcare (starts around £2k a month where we live) and again the list goes on...
DH (41) and I (37) are due our first in 9 weeks and we have been shocked at the costs. And then there is the unaccounted for costs too. We are both in the high income bracket and we are both so glad we waited till now. I also work for an organisation that has enhanced maternity benefits. But everyone is different so if you think you are financially in a position to do it now, then I wish you both well with ttc.
Maternity leave is basically a long holiday that you can only take if you can afford it
Well, er, sort of
It's long term leave where you will be utterly knackered, quite possibly never sleeping more than
90 minutes three hours in a row, and often pissing yourself when you laugh. It will leave you poorer and greyer than you were before.
But it will be worth it. Start saving now.
Honestly, I started saving for my mat leave before I was even dating DH and I am so glad I did. Took the full year off with each child and didn't worry especially about money. I couldn't afford to do it again, but your outgoings will likely never be this low again . Save now.
OP, definitely sort out your relationship with your partner before you can married or pregnant! Would he not want to support you financially during maternity leave? If he is very money-orientated consider what would happen if you couldn't return to work (eg. you baby was ill/disabled, you became ill/disabled).
Marternity leave is basically a long holiday that you can only take if you can afford it
get your hard hat on op.
Ahem- ironically, the lowest paid people actually benefit more from maternity pay. SMP is paid at 90% of your earnings for 6 weeks, then at a set rate of £130 ish a week for the remainder of the 9 months. To be honest, I never really noticed the difference between the two phases of pay, as £130 is more or less 90% of my pay. Therefore I didn't really need to save up to go on maternity.
If you are earning £2k a month, surely you or your partner can put some aside or make some cutbacks in other areas so you can afford maternity leave? As someone else said, you also have to bear in mind childcare costs, or loss of earnings due to one partner going part time etc, after maternity leave ends.
In fact, once maternity leave ended and I went back to work, I was far worse off than even on maternity leave- after paying childcare I was lucky to have £130 a month left, never mind a week!
And yes, I know childcare is a joint cost. But when you work it out, it was either DH wage on it's own, or DH + my wage - childcare, so if my wage didn't cover childcare we would be worse off than without me working.
Haha Joanna and LittlePea I'm sorry, I know it's not a holiday. There's actual work involved and I fully expect to feel the most tired I've ever felt. It's just it seems like the boys club at my work will view it as no more than time off and I don't want to feel resented when I'm muddling on by with a decreased income.
hettie my relationship is fab or I wouldn't even consider having childers. He has valid concerns about the issues this endeavour will throw up and so do I. This is the main reason I was looking into it.
I like to do my research before embarking on anything. There's no way I'm just going to get up the duff without knowing what's in store.
Personally Op I think you have the right strategy in mind with regards doing your research and accounting for all costs before making such a life long commitment. I did the same
went as far as taking into account school/univerity fees et., but i am a bit controlling like that but even with the research we have faced unaccounted for costs. We are in a fortunate position though otherwise I would never have done it.
It's a very individual decision though. What's acceptable to one person is not to another.
Depending on how you live at the moment, mat leave can be a bit cheaper. We don't waste as much food, because
I never go shopping I have more of an idea what is in the fridge, I walk everywhere, I have just had my first hair cut in 6 months, no shop bought lunches... Just factor in lots of coffee shops!
You are right to look at it, it is scary and actually makes you wonder how anyone manages it... My DH is self employed so we were also pretty concerned about the financial factor when we talked about having DD and it has to be considered. We tried to save as much as we possibly could and put our savings into our mortgage as we were able to make overpayments with our mortgage. Our thinking being that our monthly mortgage payment is our biggest expense and the more we could pay to that while both working full time, the better.
Then, once I fell pregnant we changed from putting savings into mortgage to putting savings into account for maternity leave. Then, because,of overpayments to mortgage we had the option to reduce the monthly amount.
like has been said here,you'll be amazed,how much less you spend, I didn't think I went out that much but suddenly when I was pregnant I obviously couldn't drink so nights out got cheaper, lots cheaper and once you are on mat leave you can be more economical with groceries and keep costs down of catching up,with friends as it is often easier and definitely cheaper to catch up with friends at home.
I also walk,everywhere saves on the gym membership AND travel costs.
its nice to see,someone else thinking,about it, people kept saying to me we would "manage" but am a bit of a planner also, er, as you may be able to tell from long reply.
I agree with a pp - mat leave was fine money wise. It was going back to work when I came upon hurdles. My boss didn't want me to go back part time. I wasn't ready to leave DS full time at 8m so had to rethink what I wanted to do.
Nursery costs a lot. DS goes 3 days, term time only and it's 325 a month. Most people need all year nursery - it's only cos I went back to uni that I get school holidays off so can have him at home.
I wouldn't let it stop you though. Plan ahead as best you can but you do find a way to live.
We also found a lot of costs were offset. The
small fortune money we spent on going out for meals/cinema pre DS now funds nappies/clothes etc for DS.
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
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.
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
Don't forget child benefit.
And you will save money on travel to work.
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.
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!
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 ;-)
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.
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.
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.
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.
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.
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
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.
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!
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.
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
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 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 agree that I had more disposable income on maternity leave than when working full time and paying for childcare....
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.
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.
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.
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.
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
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