Three in five families take on debt during maternity leave to cope with the drop in household income, according to new research.
The survey of over 1,000 mothers by price comparison and switching service uSwitch.com found the average debt taken on was £2,012.
It also found that half of women are forced to return to work because they can’t afford to stay at home and 14% return purely to pay off their debts. Over a quarter of families are having children later than planned, waiting on average three years longer than planned. One in six say this was because they could not afford to have children any sooner. But, despite waiting, household incomes still drop 30% to £2,181 during maternity leave – £537 less than the minimum amount needed to make ends meet.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “The impact on household income will be a key consideration for parents thinking about applying for shared parental leave [which comes in on 5th April]. Our research shows that the drop in income maternity leave causes can be crippling for families. The new legislation has the potential to alleviate some of the difficulties, but parents will need to carefully weigh up the financial implications.
“Although there is still work to be done to ease the strain on new parents, families can help themselves by taking a good look at their own household budget to see where it’s possible to cut costs, no matter how small. Starting to put money aside as soon as possible is the best course of action – whether this is cutting back on coffees or the cost of household bills. Turning to short-term debt solutions may seem an efficient way to fund spending, but they can also lead to long-term debt if not managed properly. Switching providers and managing expenses is a more effective approach and can make a big difference to the bottom line at the end of the month.”