Mums forced back to work by debt and financial woes

According to new research by uSwitch.com, new mothers are being forced back to work by debt and financial concerns.

Over half of new mums returning to the workplace do so because of debt and financial considerations (52%) compared with just 22% who want to continue their career. And such is the financial impact of going on maternity leave that one in ten (9%) feel forced to return to work earlier than they would like to make ends meet.

The average family sees a 34% drop in their net monthly household income during the maternity leave period with income dropping from £3,431 a month to £2,266 a month while on statutory maternity pay. At the same time costs rocket with the average mum spending £2,152 on baby items prior to giving birth. However, the expense doesn’t stop there. While on maternity leave mums spend an additional £2,521 on baby items – accounting for 90% of the average net monthly household income during the statutory maternity pay period.

Almost six in ten mums (56%) are not adequately prepared financially to survive on a reduced income while meeting the additional costs of a baby. Just a quarter (25%) are fully equipped to fund their maternity leave and have enough money saved in advance while a lucky one in ten (9%) don’t need to worry as their partner’s income is enough to see them through. Over a quarter (29%) save less than £1,000 to help cushion the blow, but on average expectant parents save £3,265 to help limit the impact of losing a large chunk of their net household income.

As well as not saving, almost three in ten new mums (29%) are not aware of their company’s maternity package prior to taking maternity leave, while a further three in ten (30%) know that the package isn’t ideal but don’t want to wait any longer to have children. But whether women are aware or not, the effect can still be the same with many struggling to keep their heads above water once the reality of living on a reduced income kicks in. In fact, over a quarter of new mothers (27%) say that going on maternity leave has a much greater financial impact than anticipated, while four in ten (41%) say it is as tough as expected.

Four in ten new mums (41%) end up in debt during maternity leave. The average debt incurred is £1,329. This, coupled with other financial pressures, forces many to change their plans. One in ten (9%) end up re-thinking their intention to be a stay-at-home mum, while a further one in ten (9%) are forced to cut their maternity leave short, returning to work sooner than they would like in order to make ends meet.

But despite debt and financial considerations being the biggest driver behind new mothers returning to work, 40% of those who return end up taking a pay cut to go part-time. Tellingly, just 21% of new mothers returning to work believe that their future progression and earning capacity is unaffected by their maternity break.

Ann Robinson, Consumer Policy Director at uSwitch.com, said:

“Debt and financial considerations combine to be the biggest motivating factor behind new mothers returning to the workplace. Despite women being told that they can ‘have it all’ and can choose whether to be a working or stay-at-home mum, the fact is that most have this choice stripped away from them by the financial realities of modern life.

“With the new Government planning to cut child trust funds and the impending budget causing concerns over pay freezes and redundancies, family finances are under more pressure than ever. The high cost of living coupled with the often crippling cost of a mortgage means that many households today need two incomes to get by. Unfortunately, new mothers are often paying the price for this by seeing their choices taken away.

“Preparation is key for those planning a family. Check out your company’s maternity policy, calculate how much you will need to survive, save money in readiness and cut down on household bills and unnecessary expenses. By keeping a tight lid on your household budget hopefully you will remember your maternity leave for the right reasons and not for the financial headache and debt it can bring.”