Maternity Pay

[WilliamsJess]

Hello - I’m wondering if anyone has any advice or perhaps is/has been in the same situation as me?

I am 20 weeks pregnant with my first baby, due in early February 2022. I informed my employer of this just after 12 weeks, and they were super excited for me, which was nice.

My employer is very good with many aspects of the job in terms of company benefits etc, for example paying everyone winter gas bill last year whilst we all work from home, bonuses and a generous salary, so I somewhat expected the Maternity Policy to be quite generous as well. Oh how wrong was I…. I have just been given the policy today, and it is literally the bare minimum. 6 weeks on 90% salary, and the rest SMP.

I have some savings, but not a lot and we still have a lot of baby stuff to buy. My partner is self employed and earns good money, about £45k.

It’s really unfortunate as we currently have a lot of outgoings: Mortgage, Household Bills, Car, Kitchen Repayments, my partners Tax Return etc.

My usual salary is 23k, and dropping down to SMP is going to be a massive struggle. I’m considering only taking 6 weeks maternity as I fear we won’t afford any longer than that, especially when SMP still has Tax, National Insurance (which is increasing, thanks Boris) and Pension contributions deducted. I’m lucky enough to have the option to work from home full time, and my partner does also so I feel like juggling work and the baby won’t be that much of a struggle. Hopefully. My company are also really flexible with working hours.

Has anyone else been in a similar situation? Am I entitled to any addition help such as Child Benefit, taking into consideration my partners income as well? I can’t really find any clear guidance on the internet… any advice would be greatly appreciated ❤️

Going back to the £25k tax bill he had, that must mean he earned £80,000 for that tax year !

Tbf your DH earns 45k, that should cover all the bills for a few months whilst you take say 6 months leave, then return to work

Save as much as you can now.

Buy everything second hand, except car seats & mattresses. Honestly, I have 2 kids and rarely buy anything new, maybe for Christmas etc but even then I love a bargain! Especially buggies - there are tons of Facebook groups for reselling biggies of all brands.

Make sure you have child benefit from day 1.

Use your annual leave, which will be full pay. You can't used annual leave at the same time or during your maternity leave, it you can bolt this on the the end of your maternity leave.

Do you work full time? You could ask to return part time, maybe 3 or 4 days per week, and then use annual leave days per week which will stretch it out longer and give you a 60% income or eve more weeks.

Hardly on the poverty line if he has £25k tax to pay.

You do what everyone else does and save save save.

As your baby is not due until next year are you able to see if you can carry annual leave over to next year so you are starting your maternity leave closer fo when you actually give birth? I was able to carry 9 days over from last year which helped pad out my first two months on SMP.

My company had never had anyone pregnant so there was no policy in place. It's irritating that I could be off sick for 3 months on full pay but they didn't offer me full pay for the first 3 months of maternity 🤷🏼‍♀️ but it is what it is.

DH pays for the majority of things like shopping, mortgage and the loan we took for our cars/garage conversion, our joint account has the main bills coming out and I put more in during the build up to me going on leave, along with saving £20pw. DH is on c.£42k and I'm on £20k but that only went up in January so my 90% SMP wasn't calculated on that.

Do you have any money in your house? Could you take out some equity and then overpay on your mortgage later down the line to make it back?

Have you also considered speaking to your mortgage lender and seeing if you can extend the term of your mortgage and this will make your monthly payments decrease?

OP maybe it's best to give us a breakdown of yours and DH monthly incomings and outgoings, we may spot areas you can save a bit extra on

Also everyone has a different experience. With my first child I was still recovering 6 weeks after child birth. Traumatic birth and lots of stitches. No way could I have gone back to work after 6 weeks, I was too poorly. My baby also took about 95% of my waking hours so again there is no way I could look after a baby and work at the same time.

My second baby was a breeze, and I guess in theory I could've worked after 6 weeks, but I didn't want to and am glad I planned for longer off work.

I'm not saying you can't, shouldn't or couldn't go back to work after 6 weeks, but that would be very early to go back, and unusual.

Take a look at Kate Lawler. She is a DJ who planned to take 6 weeks but ended up much longer due to various reasons. She is very open about her struggles with motherhood with her first baby x

It sounds like your kitchen repayment is the blocker. You mentioned you didn't want to pay loads of interest, but have you thought about taking out another loan on a longer term to clear the debt and pay lower monthly payments to help cover the shortfall when you go on may leave. Paying more interest isn't ideal long term but it may help you out now.

You need a spreadsheet and a serious talk with your other half. List all incomings and outgoings, what are essential/committed spends and what could be cut back now and in the future. What debts can be transferred to 0% etc.

It may also be worth speaking to your company about their mat pay policy. Many cut theirs back on legal advice when Shared Parental Leave came in because paying more for mat leave and less for shared Parental/ paternity/adoption leave would end in discrimination claims. A lots changed since then. Your company might make an exception, if you offer to sign a contract to say you'll pay it back if you don't return for at least a year after mat leave etc. Worth a try.

You and your DH should also look into shared Parental leave, you can still get it when self employed.

Kit days are days you work while on mat leave that you get full pay for, I think the limit is 10 off the top of my head.

Hi @WilliamsJess - I was in this exact position, our finances look exactly the same and I had my baby in Jan of this year!

Realistically, 6 weeks off work doesn't sound right to me personally. You can't look after a 6 week old baby between you whilst you're working and you don't want to put a 6 week old in childcare. I hope I don't sound judgemental, because I don't mean to be.. But going back to work at 6 weeks would be my very last resort, eg if my husband was suddenly made redundant or something awful.
You need time with your baby. This isn't just about money.

Your husband is on a good wage. You should see where you can cut back at home and start getting some good savings together now.

Best of luck with everything x

@Hercisback

Hardly on the poverty line if he has £25k tax to pay.

You do what everyone else does and save save save.

That’s also includes National Insurance and Student Load repayment as well, it’s not all tax. I’ve also said he isn’t earning as much this year as he did last year.

If you’re on PAYE you should get some tax refunded in March, depending on when you start your mat leave. When does your annual leave year start? If possible take all acrued leave at the end of your mat pay.
Your employer is surely not going to allow wfh if they know you have a few weeks old baby at home with no childcare. If you’ll be in the house an au pair might be an option although not sure if they would be sufficiently co fi sent with such a small baby

*confident

What are your outgoings then, OP?
I've estimated a combined net monthly income of £4,400.
Kitchen repayment is £600 so that leaves £3,800.
How much is mortgage? Around £1k? That would leave £2,800.
Council tax and other bills (energy, water, tv/broadband, TV licence, mobile phones) around £400? That would leave £2,400.
Petrol, car insurance, breakdown insurance and road tax... no idea, £250? That would leave £2,150.
Obviously you still need to pay for groceries and all sorts out of that £2,150, but there should be plenty left over.
Is there another big outgoing that I've missed? Car loan repayment, credit card?

Is your partner generally a spender or a saver? Im struggling to understand where his earnings have gone. Did you recently buy and furnish a house, did it get used up for that?

Even if it is student loan and NI, he's still in the higher percentiles of earners in the country.

Sit down and budget together. Stop spending on non essentials and save.

It sounds like the main thing that would benefit you both is to start thinking of your joint income as a single pot, rather than "yours" and "his". I know you aren't married but in my opinion, when you have a child it doesn't really work like that any more. Once you do that, you'll both have full transparency over the situation and can see where your money is going and what you might be able to save. This will be much harder if you're working from the idea of 2 pots with the mindset of "I'm responsible for half the kitchen repayment". You can't really do this with babies.
(And besides, you earn 1/3 of what he earns, gross, so why are you paying 1/2 of the kitchen payment? Do you pay half of the mortgage as well and expect to pay half of the childcare bill?)

If your kitchen repayments finish 3 months after the baby is born then that sounds promising. That's almost £600 saved (your DP could continue to pay his half to you to help cover your losses). So you'll only be about £300 lower than your usual wage which is pretty good really.
You need to find a way to manage for 3 months. Could you really cut back these next few months? No takeaways, no meals out, cut shopping bill by having some cheap meals/batch cooking, cancel any subscription, get some unused items on marketplace, overtime opportunities?
I don't think WFH with a baby is realistic personally. Perhaps it's just my parenting but both of mine have only napped whilst held and just been very held generally, although are very content while doing so. I don't get much done in general (nevermind if I was trying to work) and my youngest is 11 months now. It doesn't get easier as they get older unfortunately as they want you to play/entertain them, are into everything they shouldn't be and like to risk life and limb by constantly climbing etc. If you and your partner can work contrasting hours then it's a good solution, otherwise you may have to really think about how you can tighten your belts before looking into nursery/childminders.
I appreciate it isn't helpful advice as your in this situation now, but as a household you are on a good income. By the time you go back to work your on the same as me and DH and we have to factor in a nursery bill of £1100 per month for our two (that's after the 20% help). And were very lucky because that's a flexi contract (I work shifts) so it could be a lot worse.
Children are so expensive... luckily they bring so much joy to compensate 🤣

It is nice to know I’m not the only one worried about things like this. I must say I’m shocked at how little maternity pay is and that we have to pay NI and tax on it!

First things first. When you return to work where I'd your baby going? Around here you reserve your spot after the 12 week scan. Most nurseries don't take until babies until they are 3 months old, and the first year is around £1000-£1200 a month. I returned to work at 3 months as I'm the higher earner and SMP didn't cover our mortgage. It's quite doable but you do have to review your outgoings in the first few years.

Op, are you still in shock because I know I majorly panicked, Shed tears and stressed silly when I found out what maternity pay actually was… I didn’t plan my pregnancy it was a shock and I think had I known beforehand I never ever would of got pregnant… as it is I am glad I am now and I have calmed down a lot in recent months (I’m now 22 weeks). I also will get stat and it is such a worry but my DP assures me we’ll make it work.

PS. My plan is to take 6 months for now.

I could just about function at 6 weeks let alone go back to work and be a professional. It's pipe dreams to think you'll be able to wfh with a 6 week old.. I really don't mean offence, but that's so unrealistic.