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Managing your money while on maternity leave


Having a baby is exciting news and sometimes a bit scary for working mums. You will be asking yourself lots of questions about your new life before and after your baby arrives. 

Amongst your questions you will be wondering what your finances will be like while you are on maternity leave, will you manage money-wise and what pay and benefits will you be entitled to.

In order to manage your finances during your maternity you need to know what your payslips will look like for each month of your leave and on your return to work. Whether you are on a company maternity pay scheme or statutory maternity pay, your pay will vary each month making budgeting harder. Some months you will get almost your full working money and for other months you may get nothing. If you know the shortfall in your earnings over your maternity leave you will be able to juggle your budget, smoothing out the highs and lows.

When you are on full or nearly full pay, you will still have deductions such as: income tax, national insurance and student loan repayments. Whereas when you are on low or no pay, you may be entitled to a tax rebate or means tested benefits such as universal credit. Thankfully, once your baby arrives your income will be increased with child benefit.

If you are on a low household income, ask your local Citizens Advice to do a personalised benefit check for you. They will take into account your changing income and your liabilities such as rent and council tax and guide you to claim applicable means tested benefits.

Choosing how early or late to start your maternity will affect your return to work date. Being able to optimise these will affect your budget and lengthen your time with your new baby. Many employers promote keeping in touch days which will add to your income without compromising your statutory maternity pay. During your leave you will qualify for holiday pay, knowing the optimal time to take this may help you to return to work on a staggered basis allowing you to ease yourself back into work. Additionally, at the end of your maternity leave tax year you and your husband or civil partner may qualify for marriage allowance.

It’s hard to know how all these factors will affect you personally but it will give you peace of mind to know them in advance. That's why we've created our Maternity Pay Calculator. It shows you your personalised maternity income in advance and alerts you to leave and pay optimisation, tax rebates, allowances and benefits.

Maternity Pay Calculator