SMP - How do others manage financially?

[tw1698]

Me and my partner found out that I was pregnant at the beginning of July, I am now coming up to 20 weeks and plan to take maternity leave at 35 weeks. (Roughly around 3.5 months wages left) - I am entitled to SMP so 90% of my wage for 6 weeks and then £151 per week after that.

For background, i take home roughly £1500 per month and my partner around £1200-1300 dependant on overtime. My income will drop to around £650 per month on maternity pay and we will be eligible for £21 per week CB.

After number crunching our outgoings (mortgage, electric, gas, council tax, internet, tv licence, insurances & groceries) are £1370. We both have other outgoings such as car insurance and petrol, (i am also locked into a phone contract until September - which will be getting cancelled when possible) which leaves me with -£235 per month and my partner with £103 left for the month. Neither of us have any debt.

Since finding out I was pregnant we have managed to save around £3,500 between us but we have sold some things to be able to do this. This will make up some of the shortfall in money.

I understand we could scrap the internet package (£43 per month) however it isn't a massive saving and provides basically all the entertainment in the house - we do not have any subscriptions/tv package.

I was planning on returning to work after 12 weeks maternity leave as MIL has offered to provide some childcare however, our baby has been diagnosed with SB and now I do not want to return until I have to. DS will require operations at birth and potentially follow up op along with catheterization (several times a day) and physio appointments (weekly) along with many other appointments.

Is this normal? I don't understand how people who don't work seem to still be able to socialise/treat their children/go on holidays. Am I overthinking or are we being silly thinking we are financially stable enough to comfortably afford having a child?

If your baby had additional care needs ( which it sounds like he/ she will ) then you may be able to claim DLA.

@Babyroobs

If your baby had additional care needs ( which it sounds like he/ she will ) then you may be able to claim DLA.

Thanks @Babyroobs , i've spoke to people at SB charity and they say that most babies get knocked back for DLA because they require "lots of care" regardless. Didn't want to factor in any potential help we could get if we wasn't eligible. Just doesn't seem financially feasible to have a child! Makes no sense when we both earn more than the national average!

As the saying goes, watch your pennies and the pounds will look after themselves. It might be worth shopping around for utilities or the internet etc to see if you can get better deals. Some families also stretch their mortgage over a longer period so the monthly amount is lower. Have a think whether you need 2 cars as that’s quite costly. Also things like batch cooking and freezing etc. You might find that saving £10 here, £20 there adds up to a quite a lot.

We saved like nobody's business while pg for both babies. Helped mainly by the fact that I get dire morning sickness so stop all spending on any form of going out of the house apart from to go to work!

When the baby comes there are loads of good FB groups selling nearly new baby clothes. Sell on your maternity clothes unless having another. Put the CB in a separate acc and use just for baby stuff

We also share a car and get groceries from Aldi. Go on money saving expert and make sure you have the best deals for everything.

Well the good news is OP that full time childcare is usually in excess of £650 a month. So if you intend to go back to work full time, you will probably actually be no better off.

A lot of people receive enhanced maternity pay which pays them on top of SMP up to 18 weeks. I received 50% on top of SMP and the current scheme with my employer tops it up to 100% to 18 weeks. I went back to work after seven months because I couldn't afford the pay cut.

Depending on where your maternity leave falls in the tax year, you may receive tax back, which will top up your monthly wage. I received this while on SMP.

The rest is a matter of saving before baby arrives and cutting back as much as physically possible. I didn't spend as much on petrol, lunches, randomly popping to the shop on lunch etc while I was off work.

I’m only eligible for MA as I’m self employed so don’t even get the 90% for 6 weeks. This is my second baby and it’s a bit tougher this time as I didn’t work for 4 months due to Covid, so I’ve not been able to save.
I’m going back to work after 3 months again as I simply can’t afford to live on the money. I also have to pay business costs from my MA so it’s just not financially viable for me to be away from work for too long.

Some brilliant suggestions - we definitely need two cars as hospital appointments and physio therapy appointments are a 40 min drive away and my partner will need his to get to work so don't want to chance not having a car to get around when needed. Probably won't use as much petrol especially not having to drive to work etc.

We can't spread our mortgage any further as we already have it over 25 years however will be looking at our other bills to double check we are getting the best deal. I will be saving £70 a month come September when my phone contract ends too. I guess it just a temporary problem being pratted and we we muddle through.

I guess I was just having a whinge - we will make it work!

Dependent on age mortgage goes up to retirement age these days so can spread over 35 years for example. Then start overpaying when you are in a better situation.

Smp is low so yes this is normal unfortunately. Obviously you're pregnant now but this is why the financial costs should be carefully considered. Lots of people don't have children or have only one due to cost. Lots of people save prior to conception as a way around maternity leave. Or have jobs with better maternity pay as smp is so crap.

Childcare is also expensive so unless mil does a lot of childcare you will likely have to live off this amount for a while. Are you entitled to tax credits? I'd also recommend looking at extending the mortgage term but then over paying or reducing in future.

Sorry that first paragraph comes across as way more judgemental than I meant it to be. I just meant that. Smp isn't good enough so lot of people have to plan for this. And that's why lots of employers offer more than Smp.

As you are the higher earner, could you use shared parental leave in order to afford having one parent at home a bit longer?

Enhanced mat pay, use of holidays (very grateful to my company and corona from this) and allocating x amount of savings to see us through the month when we only receive smp. Tbh it never really recovers once returning to work, childcare for my eldest before her free hrs kicked in was £65 a day, then when they start school they still need childcare + uniform + school lunches + trips....goes on and on. Save save !!
I will say your internet and phone costs are extortionate. I pay 24 quid for sky internet : used to pay 14 but needed fibre to wfh. Phone is £20 a month. Don’t bother with a landline. Octopus energy is saving us loads, and all shopping is at Aldi.

*months not month on smp- I wish. I will have 4 months on smp

Are you married? I only ask as you could do the tax sharing thing (not sure of the technical name) so you give him your tax free allowance and he pays less tax, not much but it's something. Other than that it's really a case of tightening the purse strings, shopping around for utilities deals (our WiFi and landline is £25 a month which would save you a bit), and meal planning etc to make sure no waste in grocery shop.

Is there a specific reason you want to start Maternity leave at 35 weeks?

I would delay it until as late as possible such as at least 38? If you become unwell or baby turns up early it can be brought forward.

We’d saved the amount we needed to make it through my mat leave shortfall before we even ttc.

It always amazes me that people wait until they’re pregnant and THEN wonder how they’ll manage.

You can stretch your mortgage over 35 years if that helps.

It might also be worth considering working later into your pregnancy than planned. Most people don’t go off work until 37/38 weeks.

Another thing I did was use up my annual leave to work part time for several weeks.

We saved as much as we could prior to getting pregnant and while pregnant. But it's tough those few months.

Definitely check all your utilities as you are paying a lot for Internet and phone so might be able to save a bit.
You have another 4 months of saving up.
I didn't start maternity leave until 40weeks, obviously depends on your job but you are planning on using 4 weeks before baby arrives.
I would think 40 min drives for therapy etc might mean you get some DLA, maybe low rate, although the people you have spoken to probably know better but definitely apply.

I've just read your comment about DLA and saying how new babies need lots of care regardless.

This is true - babies to need a high level of care regardless but please do apply for DLA. You can apply once baby is 3 months.

The form is LONGGGG but it's worth tackling it. If they say no you can appeal.

I kept a diary for a week or two which I found useful.

Our child has a feeding tube and I can't find a childminder or nursery locally who will accept her so I'm stuck home unable to work and the DLA and carers allowance does help. It's nowhere near a full time wage but it's a massive help.

You'll also be surprised at how little you spend. Long walks, take a coffee/ packed lunch. Lazy days, hardly using the car etc. I used to walk round town / supermarkets and be able to shop really savvy and also had time to batch cook etc too which saved money