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Borrowing to look after your baby

Posted 15 April 2015

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New stats reveal that three in five families have to borrow money during maternity leave, but will the change in law help?



Shared Parental Leave (SPL) is a new rule that lets new mums and dads split their time off after they’ve had a baby. This means that it doesn’t just have to be mum who stays at home with the baby … if she wants to go back to work, dad can use some of her leave to stay off instead. So, for example, if mum is the higher earner in the family it may make more sense for her to go back to work and dad to take parental leave to look after the new baby.


According to research* from, three in five families borrow an average of about £2,000 during maternity leave to cope with a drop in earnings, and half of mums say they returned to work because they couldn’t afford to stay at home any longer. 14% of mums even say they went back to work just to manage the cost of their debts.


The research also found that average household incomes during maternity leave falls by 30% to £2,181 a month, and this is £537 less than the estimated minimum amount parents need to cover their bills and the cost of staying at home with a baby. It’s no wonder that some parents have to borrow at this time to make ends meet, as the statutory pay isn’t enough for most families to live on alone.

How to cope

Managing household bills when you’ve got a new baby can be tough, but don’t be tempted to turn to short-term credit options like payday loans or credit cards. While these might enable you to cover your bills one month, it means that come the next month you’ll have even more of a shortfall to make up and it could lead to more problems.


If the statutory pay won’t be enough for you to rely on, you’ll need to look at other ways to cover the cost of having a baby. The government can help through a range of benefits and tax credits. Child Benefit is available to all but the highest earners and you can claim for any children you have under 16, and you’ll get £20.70 per week for your eldest child and £13.70 a week for any other children.


Child Tax Credit is available for each child you have up to the age of 16, and you could get up to £545 a year, or even more if you’re on a low income, benefits, or if your child is disabled. You also may be able to apply for a one-off Maternity Grant of £500 to contribute to the cost of having a child. To qualify for this, you’ll have to be receiving one of a range of benefits, including Income Support, Jobseeker’s Allowance and Universal Credit.

Getting advice

If you’re already struggling with debts because you’ve had time off with your baby, you don’t have to deal with this alone. Think about speaking to an expert and getting some advice on how you could get your finances back on track. You might just need some budgeting advice or you could look into the different types of debt solutions which may be available to you.


*Opinium Research conducted an online survey of 1,006 UK mothers who have taken maternity leave and have child(ren) under age 4 between 11th … 17th July 2014.

by Shelley Bowers

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