Almost three in ten first time mums (28%) have been forced into the red, racking up an average of almost £2,500 of debt because of maternity leave, according to a new study by uSwitch.com, the independent price comparison and switching service. The financial burden of maternity leave forces one in ten (10%) to borrow from their nearest and dearest, but 14% resort to credit cards, loans and overdrafts In fact, just one in four (25%) new mums feel financially prepared.
However, new mums aren’t necessarily unprepared because they are rushing to start a family – in fact almost one in four couples (23%) delay starting a family because of the cost. And more worryingly, four in ten (39%) first time mums that don’t want anymore children said they were put off by the cost, while a further 9% have been left feeling guilty because they couldn’t afford to give their baby everything they wanted to.
The rising cost of living, including a 21% hike in energy bills and an almost 6% rise in travel fares has put pressure on consumers. But the fall in income for mums-to-be during maternity leave could push many over the edge. Those going on maternity leave see their monthly household income nearly halve from almost £3,000 (£2,866) to just £1,654. Yet more than four in ten (43%) don’t save any money to cover their time off.
To make things worse, at the same time as experiencing a drop in income, first-time mums are spending money preparing for their new arrival. They are splashing out more than £1,400 on average during their maternity leave, but more than one in ten (13%) spend at least £2,500 feathering their nest. This is on top of an average spend of over £1,500 before going on maternity leave.
While the recent change to child benefit announced in the Budget is good news for some middle income families, it’s unlikely to be enough. In fact, the financial strain is so great that one in ten (11%) are forced to cut their maternity leave short and return to work to make ends meet, while 9% have to re-think their plans to return to work.
Ann Robinson, Director of Consumer Policy at uSwitch.com says: “Planning for a baby is tough at the best of times, but in the face of the soaring cost of living there is even more pressure on family finances. For some families this can mean some very difficult decisions. It’s heartbreaking that so many mums are being forced into debt or having to cut short their maternity leave just to make ends meet.
‘’Sadly, very few mums have the luxury of being able to stay at home for the whole of their maternity leave and even fewer have the choice to be a stay at home mum. It’s clear that more needs to be done by the Government to help families cope with the financial burden of parenthood, but in the meantime families can help their situation by reviewing household budgets and looking at where they can cut costs to save a bit of extra cash.”
For more information visit www.uSwitch.com or call 0800 093 0607
Researchcarried out online by EasyInsites in March 2012 amongst a sample of 1,008 mums.