Worried about maternity pay and child care

[MSG92]

Hi everyone, firstly, I am so happy to be pregnant, wanted this more than anything. Me and DH have been together over 10 years, moved into our forever home last year, quite financially comfortable albeit not well off but we pay mortgage, cars etc and have money left to save. I started freaking out recently at the thought of childcare etc. I get 90%pay for 6 weeks followed by 12 weeks at 50% + stat so I think this should be OK, but when it goes to just statutory I am now freaking out about what we're going to do, I don't want to go back to work full time when baby is 18 weeks old! Plan was to save the next 7 months and top up statutory with savings, but then we thought it might be better to clear some outstanding finances (2 cars and kitchen) to bring monthly payments down. On top of that, when I do go back, child care is astronomical, we don't have family nearby, they live over 2 hrs away. Anyone else having this concern or got through it by thinking of something out of the box? Please no sarcasm or rude comments, we have both always worked FT, not entitled to any benefits and never have had any, as far as I can see the only time we get help is 3 year old 30 hours a week. I know it'll be OK as loads of people with less manage I just don't know how!

Firstly you need to ensure you treat yours and your husband's income as shared family money rather than separate where the childcare cost comes out of only your MAT pay or wage.

Things we did that helped
Saved up!
DH did flexible working request to compress working hours into 4 days so that was 1 less day per week to pay for childcare.
I think childminders can be cheaper than nurseries?

Will you be entitled to child benefit?
Good time to check all your current providers for gas, broadband etc to see if competitive
Check your food bill- where do you shop
Move any debt you can to 0% interest where possible

Once you return to work you will find that a childminder may be more cost effective than a nursery.

I agree with the earlier poster too, make sure it’s a pool of family money and you don’t get caught funding your mat leave and subsequent childcare

Firstly congratulations! It really depends on your jobs and if that offers any flex. I work full time but my boss lets me compress my hours so I do 4 longer days and DP does similar (he can work from home in evening etc to top hours up) This means we both work longer days but only need 3 days per week in nursery with us covering a day each. I am actually on mat leave at the min with baby 2 and we intentionally waited until DC1 was 3 and In a funded 30 hour place before TTC DC2 to ensure we wouldn’t have childcare costs while I was on mat leave then 2 nursery bills! I am planning to reduce my hours slightly to do 3 longer days (will work out around 28 hours) so we will still only need 3 days in nursery and I can do some freelance stuff around DP. We also have no local family help but I do have a good friend from work who has recently retired and she is happy to be an emergency contact for nursery should we ever need a pick up or day covered at the last min. Depending where you are a child minder is sometimes a cheaper option. Nursery has been a short term financial hit for long term gain for us. It allowed me to stay in the work place, climb the ladder and put us in a better position out the other side but it is stressful finding the right fit!

Tax free childcare. The govt will top up 20% of what you put into an account (to a max of £500 every 3 months).

I went part time because it mean less of my wage was taxed and I keep a larger proportion of it while cutting down on childcare costs. I also work Saturdays so dh looks after dd.

Dd will be coming out of nursery when I stop working (maybe get keep her in the first month while we establish breastfeeding)... gonna be tough!! Also have to stay off a year until dd gets her 30 hours free.

I’m currently on my three months of nothing for maternity leave. My choice to take the year after 4 years of fighting u fertility and ivf there was no way I was going back sooner than I had to!!

Things we did to try and help

1. cut as many debts as possible. Own one car. Low finance on the other. No credit cards etc
2. looked at how we could reduce as many bills as we could by switching or trying to use a little less
3. planned weekly meals to reduce food waste and save money
4. we don’t have things like sky. Do have amazon prime though which in my opinion has been essential haha
5. set up direct debit savings when still working to build a slush fund.
6. worked out what I would be paid and when so it wasn’t too much of a shock.
7. open and honest discussions about paying into the joint account. We usually pay exactly the same amount each. For example £600 each. When my wages dropped we worked out the percentage of how much I had been paid and I paid that amount into the account. So if I had been paid 60% of my usual wage I paid 60% of £600 into joint account. DH picked up the rest when needed.

It’s been tight but doable. And let’s face it I’ve spent a lot less money on coffe and cake with mum friends then I thought I would

Infertility not u fertility!!

Sit down and really do the maths of what you need per month versus what is coming in and work out if your partner can cover all of those costs himself or a large proportion of it.

It's probably worth doing a combination of the two - reducing monthly outgoings whilst saving some be that pay off the cars but leave the kitchen etc and also look at whee outgoings can be reduced. For instance are you on SRV for mortgage and can save with a fixed deal or switching energy providers etc.

Remember as well that legally you can't use holiday during mat leave so you can acrue and then "go back to work" say around 9 months but actually it will be about 11 months.

As for childcare look into childminders they are cheaper but as said the govt 20% really does make a difference. We also looked at the cost vs one of us going part time and actually we are £100 better off a month by my husband working 4 days a week.

I also gave myself a budget when on mat leave of £200 for things like coffees, classes etc and then tried to save as much as possible especially when on full pay.

It's overwhelming at first but a good spreadsheet helps

I have exactly the same maternity leave - 6 weeks at 90% and 12 weeks at 50%. I'm the main earner by 3x DH. I have no choice but to go back to work whether I wanted to or not. Although with adding annual leave on it will work out about 21 weeks (buy a week minimum from your employer if you can and with covid rules this year I am carrying over as many days as possible to next year). It is what it is. I'm having twins by the way so yes childcare costs are astronomical.

We have saved about £6k which will cover a childminder until they are 1 and then will take out a £25k loan over 10 years which we will use to pay childcare

Take advantage of the tax free account and look at Childminder's rather than nurseries as they are almost half the cost in my area

We were very naive the first time round with DD when it comes to childcare costs and are better prepared financially this time

Great advice so far. Even on a good salary the cost of childcare is depressing. You just have to struggle through, if you can possibly persuade your employer to let you compare your FT hours into 4 days that is a brilliant idea BUT beware, it might only be worthwhile if you and OH BOTH can do it, as many nurseries offer a discount for being full time so that fifth day is almost free. Phone the nurseries nearby and ask them.- rates are rarely advertised online so ask for their price list by email.

In terms of saving money, I also cannot recommend enough buying 2nd hand for baby - eBay and Facebook market bundles offer exceptional value. When people offer to buy gifts, ask for practical things not clothes or teddies.

Hey congratulations on your pregnancy :)

My maternity leave is the same as yours. When I first found out I was pregnant I kept saying to myself 'I've got to go back after six weeks'. This is because I thought our bills would only be doable with two full time wages. We then sat down and broke down all of our bills. And asked ourselves what was a need and what was a want. I found out I was pregnant last December so we started paying off the credit card with higher payments each month so that debt was gone by May. It sounds awful but lockdown really helped us save. Not using petrol, no popping to shops during lunch break, and just not going out and seeing others made a massive difference financially. When then looked into child benefit and tax free childcare which we're were entitled to both. They both make a huge difference with our outgoings.

Like others have said, ask people for practical gifts and buy clothes from places like Morrisons or Tesco (so cheap). I've also decided that next year I'm not going to buy friends birthday presents. I'm going to be honest with them and send a polite but truthful text saying that I am now on SMP which doesn't even cover my bills so I'm having to be extra careful with my savings but that I also don't expect a birthday present back. If they're true friends they'll understand.

Just save save save. This month will be my first month on just SMP so January will be tight but apart from bills and other half's birthday, there's nothing I particular need so I won't be spending a lot out of my savings. I have also asked for voucher as Xmas so can buy new clothes (desperately needed though!) pregnancy weight not disappearing as quickly as I thought

Also like others have suggested, can you use annual leave for when you return? I'm returning on 19th April part time but using my annual leave hours so not returning until 21st June but I'll be on a part time wage so that'll make a massive difference.

I just want to say that I was just like you when I found out I was pregnant. We were so happy but financially concerned. Just save save save as much as you can. You can do this and you will make it work.

Thank you for all your lovely posts, I saw someone else post something similar and they got ripped to shreds by people saying you shouldn't have a baby if you can't afford it and do you expect the govt to pay for it, but you've all been lovely.

What's slightly concerning is I consider myself pretty money savvy already, so I always swap utility providers, WiFi etc, I will cut the now tv package we have, it's only £20 a month but every little helps right. Unfortunately we need 2 cars as we both work 45 minutes away and DH does shifts as a detention officer in the police, we could look at changing cars, albeit we only have vauxhalls, we aren't flashy people so were never bothered, just wanted reliable because of the commute. But every debt we have is 0%, what's annoying is £400 a month going out will be finished in April 2022, his car and the kitchen. I've definitely been looking on ebay for nursery furniture, I know our parents will both help out at the beginning with bigger costs of furnishings etc as they want to so that's good news.

The town I live in does not have 1 child minder! How ridiculous, so if anyone is a childminder move here and I'm sure you'll do well! I'll definitely look into the 20% childcare thing from the govt, I haven't told work yet, 12 wk scan will be 5th Jan so was going to tell them after that and hopefully speak with hr about what will be coming in and what I can do. Hoping to compress my hours to 4 days like others, unfortunately that's only viable for me not DH but it will help.

Isn't it extortionate for child care, surely this should be assessed! Also makes no sense why someone I know gets free child care at 2 years old because she works 2 days a week whereas people who work full time and actually need that aren't entitled! Seems a bit arse backwards doesn't it!

I always think the best thing to do is write down all incomes and outgoing DH loves a spreed sheet so we have one that he updates each month so we know exactly what we have left. All money is pulled together in a joint account and all bills come out of that, then we transfer a set and equal amount into one another's personal account. As we have done that we know what our monthly forecast for the 9 month may leave so know what we will need to top up each month from savings.
When returned to work I looked at all the different shift partners I could do that would give us the most money but balance with childcare, I found doing 3 long days 12hr shifts work for us and would still leave us some money left each month for savings as I didn't want to go to work and still have nothing at the end of the day I would have not gone to work as much as and did less day care x

@MSG92 only annoying thing about govt childcare scheme if that you can only pay in after maternity leave not before. But you can lump sum if you can save a bit

If you really have done a budget and there is nothing you can cut you might need to look at cutting your outgoings another way. If you can't get rid of a car is an interest only mortgage an option?

This is going to sound odd but I'm about 18 months you'll get what I mean.

You just find a way!

We have ranged between claiming UC childcare to the 20% reduction and back again, with various job and salary changes.
You live on what you have left after all the bills and childcare are paid for. It works itself out. Obviously you have to mindful but it will work out in the end

If they get free childcare at 2 then there is another element going on of very low pay/background.
You do get hours when they are 3. We are due our second and with the funded hours and sibling reduction at nursery we will only pay £150 more then we do now for 2!

Its also knowing how flexible your employer is for working from home we cut our nursery bill as we are currently wfh and likely to only be back in the office 2 days a week so only need 9-3 which actually makes a huge difference.

If you work 45 mins away it might be worth looking at childcare options around your work or husbands work.

First 3 months baby only needs vests and sleep suits and cardigan/fleece really! Outfits are cute but pointless!

Definitely second buying things second hand you will be amazed how much you can get which still has tags on!
Only things which need to be new are mattresses and car seats.

You also don't need a baby monitor til at least 3 months as they are always in the room with you. We didn't bother buying a cot bed until my son was 5 months and were able to use vouchers people gave us. IKEA change tables are fab as well and about £25!

We also saved money by using cloth nappies again mostly second hand and by BF! Some mums BF for the bond etc I did because it was free!

Could you ask your employer to equal your payments over the course of your maternity leave? I’ve done this both times I was on maternity leave and it helps so much to know exactly what your monthly income will be and not having to worry about how you’re going to live off just stat pay.

@MSG92 maternity.money/maternity-pay-calculator

This was the most helpful website I found.

Remember you get 10 KIT days which could be used for the last 3 months. We also accrue our holiday plus bank holidays so you could go back in month 11 but still not really go back until month 12.

I'm very black and white about numbers...but! I have witnessed friends in worse situations than me "make it work" I think you spend less than you anticipate.

My situation is similar to yours. DH's wage can pay every bill but for anything else it will just be mat leave money and I am only on statutory- no 50%. I have cleared as much debt as possible and feel calmer about it but it's still far from ideal.

I haven't got to the childcare stage yet but I have also witnessed friends with no local family "make it work". Parents staying over for a night and stuff to help.

Easier said than done but Focus on yourself for pregnancy be as good as you can with money and take a leap of faith for the rest! Xxx

Thanks all, you've been great.

I have done a few checks and I am not entitled to anything other than the government 20% thing.

I would love to have 1 car but with DH's shifts, 2 earlys, 2 lates, 2 nights it's just kit feasible. Work will be fairly flexible i think, and let me condense to 4 days so that helps.

I agree, it always seems to work out in the end, it's just hard when you are writing it down to see how! I'm going to focus on paying some debts (they are 0% interest) and putting some money aside to top up maternity pay so I can take longer off, it's swings and roundabouts isn't it, do you go back and pay out for childcare or do you take longer off and not pay someone else...

OP, assuming your employer is like mine, you don't have to say when you are returning from mat leave, so save and budget etc and see how it goes. I don't know how much lockdown affected things but you don't have to spend lots of money on mat leave, you won't be going out for meals, nights out, holidays, cinema etc as much and get baby things 2nd - facebook market place is your friend.

@MSG92

Thanks all, you've been great.

I have done a few checks and I am not entitled to anything other than the government 20% thing.

I would love to have 1 car but with DH's shifts, 2 earlys, 2 lates, 2 nights it's just kit feasible. Work will be fairly flexible i think, and let me condense to 4 days so that helps.

I agree, it always seems to work out in the end, it's just hard when you are writing it down to see how! I'm going to focus on paying some debts (they are 0% interest) and putting some money aside to top up maternity pay so I can take longer off, it's swings and roundabouts isn't it, do you go back and pay out for childcare or do you take longer off and not pay someone else...

Depending on who earns more there is also the option of shared parental leave. I earn over double my husband (we do all bills as a percentage of income so I also have greater to pay each month) so we do shared parental leave when money starts dropping off.

I'm in the public sector so have a very generous mat pay but I do keeping in touch days when I go to smp and then swap with my husband for shared parental leave. You might want to speak to your husband about what their mat/parental leave is like and if this is something you wanted to do.

That website is so useful @serialplanner (you live up to your name!) Thank you

Appreciate this really won't affect everyone but if you take a car allowance instead of a company car you keep that through maternity, even on the unpaid bit. Its because they can't take your physical car off you during maternity so they don't take the cash equivalent either. Its not law I think (the company car is I believe) and there have only been minimal legal cases to challenge it but a decent employer won't quibble. Its made my finances look a lot better as I plan

Good luck OP I think your planning ahead shows you'll be fine, everyone just seems to manage somehow!

I spent the first few weeks of pregnancy stressing about this and decided f* it, it'll all work out! I only get 6 weeks at 90% pay then straight down to SMP £151 a week! That doesn't even cover my mortgage I earn more than DP so I'll be having my 6 weeks, probably another 6 covered by savings and then using 5 weeks annual leave before going back to work. I'm not due until May so hoping to save a bit more before then and take a bit more time but for us going back to work early is likely the only thing going to work. We'll likely share mat leave so when I go back to work my partner can stay home with the baby on the SMP amount until he/she is old enough for a childminder. I'll also be changing my days and hours around so baby only has to be there 1, max 2 days a week. You'll find the right pathway for your family so don't worry, have a safe and enjoyable pregnancy x

If you have credit cards pay them off and get out of the habit of using them. Are two cars necessary? Also have a talk about finances and both of you start saving. We do not have joint accounts nor do we want them. I normally pay all the bills but on mat leave I paid half and dh covered the rest. The main thing is that you should not suffer financially whilst on mat leave while your oh still has money to spare so a chat is necessary.

Also consider if you would be able to get flexible working so either working from home or a shorter week. Could you afford for one of you to go part time so the childcare bill is reduced? Consider a childminder over a nursery etc.

Kids are only as expensive as your tastes. You will probably get gifted lots of clothes and may have friends or family that will happily give you some belonging to their own kids. You can shop from supermarkets for clothes at a reasonable price and quality. You can be savvy about buying big ticket items and get voucher codes, take advantage of sales etc to get money off.

You will also save money on things like buying lunch, meals out at least in the early days. There are normally a lot of baby groups that are free, thinking of groups in the library or church , community halls which only have a nominal fee.

It is good that you are thinking about this now and being proactive!

Forgot to say you can buy secondhand clothing bundles online too.