Nearly half (44%) of UK families have less than two months of savings if their income suddenly stopped, new data has revealed.
Research from MoneySuperMarket found that day-to-day parenting costs are negatively impacting long-term finances – they also found that one in five parents have savings that would last less than just one month.
Those with children often find themselves paying for housing, bills, and groceries alongside all the amenities children need – even the ‘lower cost’ of raising a child in the UK (with no nursery care, state school attendance, no afterschool care and no family holidays) is £143,412.
One woman whose savings were spent on her children is Cleo, a mum of two girls from North London.
She said: “The year I took maternity leave used all our savings. We got pregnant while working abroad, so despite having worked in the UK for 10 years prior, when I returned seven months pregnant I discovered I wasn’t entitled to statutory maternity.
“Putting our daughter into nursery for four days provision cost £1,600 a month, and alongside our mortgage this meant our disposable incomes were minimal – and we certainly were not able to save.”
To qualify for Statuary Maternity Leave (SML), individuals must earn £129 per week (on average), give an employer 28 days’ notice before you take leave, prove they are pregnant and have worked for an employer continuously for 26 weeks.
For the first six weeks, the mother gets 90% of their average weekly earnings – then, it goes to £194.32 or 90% of their average weekly earnings (whichever is lower) for the next three weeks.
This is not the only payment mothers can receive from the Government either – the Department for Work and Pensions offers a Maternity Allowance for those who cannot get SML. This grant offers £194.32 or 90% of an individual’s average weekly earnings (whichever is less) for up to 39 weeks.
Cleo’s girls are now six and eleven, but she still named nursery as the most expensive part of childcare.
She explained: “Nursery fees are extortionate. Your income would need to be well above national average to be able to pay the fees and not have it have a significant impact on your standard of living.”
As MoneySuperMarket discovered, the ‘mid cost’ of raising a child in the UK that includes just part-time nursery care, as well as state school attendance, afterschool care, and family holidays, is £194,246.
These costs have meant Cleo and her partner have had to make financial sacrifices – now, they ‘hardly’ buy new clothes or home decor, and Cleo ‘spends less – if anything’ on herself.
“Prior to having children, we went on frequent holidays.” The 45-year-old explained. “This has all but stopped. Leisure time is also restricted to free activities like playgrounds and parks.”
Cleo is not the only one, too – MoneySuperMarket found that one third (33%) of parents admitted that when household budgets are under pressure, holidays are the first thing to be reduced.
“Having kids should not be a financial burden.” Cleo said. “The cost of childcare in those early years is unmanageable.
“For women who want to get back into work it can be very difficult to balance the benefits of a regular salary with having to give a sizable portion of that salary away to childcare.
“More needs to be done to ensure women are able to spend that time at home without it having such detrimental, long-term effects on their finances and careers.”
Featured image credit: Unsplash
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