Mums’ Money Checkup

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Q: I’m 30 weeks pregnant and planning to take maternity leave at 36 weeks. I’m worried about how we’ll manage our money without my full income. How can we make our money go further whilst we get to grips with parenthood?

Sue Hayward: Congratulations! Having a baby is one of the most exciting times of your life but can also be one of the most expensive. While the loss of an income, even temporarily, can put a dent in your bank account, there are still lots of ways to boost your budget.

Start your ‘financial healthcheck’ by finding out how much maternity pay you’ll get. You can take a year off work but you’ll only get maternity pay for nine months, and that’s providing you’ve worked for the same company for at least six months. Some companies are more generous than others with maternity pay so speak to your human resources department first, but as a general rule the basic minimum is 90% of your average gross weekly earnings for the first six weeks followed by £117.18 for the next 33 weeks. You’ll pay tax and national insurance on your maternity pay as you would with your regular salary. If you’ve worked for a company less than six months or are self employed you’ll need to claim Maternity Allowance, worth £117.18 a week and paid for 39 weeks. You can download a claim form at www.jobcentreplus.gov.uk. Dads can also get paternity pay from their employer, which is up to two weeks wages, so get your partner to sort this one out.

After your baby’s born make sure you apply for child benefit as payments are only backdated up to three months so don’t lose out! You’ll get £18.80 a week for your first child and £12.55 for every other child. Payments are made until age 16, or longer if your child’s in full time education, and the money’s paid directly into your bank account on a monthly basis.

Next up on the paperwork trail is filling in your claim for Child Tax Credit. This is tax free cash with payments based on your family income, and while wading through the tax credit forms isn’t the most exciting part of becoming a parent it’s a necessary one as payments can only be backdated for three months.

Adjusting to a reduced salary can be tough and one short term solution is taking a mortgage holiday. If you’ve got a good track record some lenders will let you suspend payments for up to a year. While you’ll still have to repay those ‘unpaid’ months, this can be added to your loan which may mean a minimal monthly increase over a fifteen or twenty year mortgage term. This can give you some much needed breathing space but if you’re really struggling speak to your lender or get help from Citizens Advice.

Right now your baby’s first car, house or university education will seem a long way off but now is the time to start saving for your baby’s future. The Child Trust Fund scheme helps kick start their savings and you’ll receive a voucher worth £250 or £500 (depending on your family income) when you apply for child benefit, and another one on your baby’s seventh birthday. Vouchers can’t be ‘cashed in’ and can only be used to open a special Child Trust Fund account; either a savings account, or a share-based account where the money’s invested in the stock market. Family and friends can also pay in up to £1200 a year and all profits are tax free and safe till your child turns 18.

If you’re planning to return to work after your baby’s born, childcare costs can take a big bite out of your salary - typically around £150 a week - so I’d suggest finding out if your employer is a member of the Childcare Vouchers Scheme. This Government-backed scheme means you can claim vouchers from your employer worth up to £55 a week which you can use to pay for registered childcare like nurseries, playgroups and childminders. If both you and your partner are employed you can double your money if you both claim the vouchers.