A Third Of New Mums Get Into Debt On Maternity Leave | Prepaid365

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19 April 2012

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Nearly a third of new mothers end up in debt during their maternity leave and are forced to cut their leave short as a result of their ailing finances.

A survey of more 1,000 new mums found that 28% ended up in the red during their maternity leave, racking up an average debt of almost £2,500.

Many have to rely on help from others to deal with their financial situation, with one in ten borrowing money from their family.

A further 14% of new mums rely on credit cards, loans and overdrafts to make ends meet while they are looking after their newborn baby.

“Planning for a baby is tough at the best of times, but in the face of the soaring cost of living there is even more pressure on family finances,” said Ann Robinson, Director of Consumer Policy at uSwitch.com, which carried out the research.

“For some families this can mean some very difficult decisions. It’s heartbreaking that so many mums are being forced into debt or having to cut short their maternity leave just to make ends meet.”

More than one in ten new mums cut their maternity leave short as a result of the financial pressures the break from work can cause, while 9% have had to rethink their plans to stay at home.

“Sadly, very few mums have the luxury of being able to stay at home for the whole of their maternity leave and even fewer have the choice to be a stay at home mum,” added Ms Robinson.

“It’s clear that more needs to be done by the Government to help families cope with the financial burden of parenthood, but in the meantime families can help their situation by reviewing household budgets and looking at where they can cut costs to save a bit of extra cash.”

The research also found that only a quarter of mums-to-be feel financially prepared for a child, while 23% delay having a child because they can’t afford it.

Maternity leave only exacerbates the problem. Those going on maternity see their household income drop by almost half, yet four out of ten do not save money to cover the time off.

On top of this, new mums are splashing out during their maternity leave – spending more than £1,400 during their time off.

While many are relying on credit cards to make ends meet, this is can easily lead to yet more debt. To avoid getting into credit card debt, take out a prepaid card that you load a certain amount on to.

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