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Managing money during maternity leave

Posted 13 March 2015

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Debt Advisory Centre speaks to a lot of new mums with debt problems. In recognition of International Women's Day, we offer some 'money tips' to expecting mums.

Having a baby is a gift. It's life-changing. No mums or dads forget the day their new baby came into their life.

Sadly, lots of mums go into debt while on maternity leave. There were reports in the media recently that as many as one in three mums go into debt while on maternity leave, by £2,500 on average.

At Debt Advisory Centre, we speak to a lot of new mums with debt problems, either because they hadn't realised how much their income would drop during maternity leave, or they weren't financially prepared for their baby's arrival.

Bringing a new life into the world should be a really happy time, and debt should not spoil that.

In recognition of International Women's Week, Debt Advisory Centre offers some 'money tips' to expecting mums.

Know what you're entitled to if you work

Statutory Maternity Pay is the money your employer is legally required to pay you while you take leave to have a baby.

You cannot receive less than the statutory amount, but you could receive more if your employer has a maternity scheme.

So first of all, check with your employer to find out exactly what you're entitled to before going on maternity leave, because very often they'll pay more than the basic amount.



Statutory Maternity Pay

You'll qualify for SMP if:

• You have been with your employer for 26 weeks by the 15th week before you're expected to give birth.


• You earn at least £107 a week on average.

SMP is paid for up to 39 weeks. The first six weeks you receive 90% of your average weekly earnings (AWE) before tax.

For the next 33 weeks, you receive £135.45 per week, or, 90% of your AWE (whichever is lower). This is for the tax year 2012/ 2013. As of April 6th 2013, this will increase by £1.35 per week.

Working mums can take the rest of the year off as unpaid maternity leave. That means they can be away from work for up to 52 weeks, but not all of it is paid.

Know what you're entitled to if you don't qualify for SMP

If you don't qualify for SMP, then you are usually entitled to Maternity Allowance. Expecting mums receive £135.45 a week or 90% of their average weekly earnings (whichever is lower).

It is paid for up to 39 weeks and you can claim once you've been pregnant for 26 weeks.

Other benefits

Expecting mums and new mums can be entitled to other benefits in the UK. You won't always be told what you're entitled to, so you really should ask your local benefits office (and your employer).

Other benefits could include:

• Tax credits

• Housing benefit

• Time off for antenatal appointments

• Free dentist care

• Milk vouchers

If you have debt worries, there is help available. Get expert debt advice and help instead of suffering alone. Debt Advisory Centre never turns anyone away.




by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.