I’m standing at the edge of a financial precipice. I’m a 32-year-old woman doing a job I love. I’ve been beavering away solidly for 10 years and I’ve been working hard to climb my way up the career ladder. After starting out in London surviving on a pitiful cub journo’s salary, I now earn enough money to pay my bills, do and buy what I want – within reason – contribute to a pension and put a little bit away each month. But within the next three months, all that will change.
I’m pregnant and my first baby is due in six weeks. I’m one of the hundreds of thousands of British women only entitled to statutory maternity pay while I take time off from work to raise my child during its first year.
That means I’ll get 90 per cent of my salary for the first six weeks, followed by 33 weeks of pay at £139.58 a week. And I’ll still have to pay tax and National Insurance. Over the nine–month period, it’s roughly a third of what I usually earn. And if I decide to take the remaining three months’ leave I’m legally entitled to then after those first 39 weeks are up then I’ll forfeit my pay completely.
However long I’m off for, the reality is I’ll be almost entirely financially dependent on my husband – to keep a roof over my head, food in the fridge, clothes on my back, diesel in the car…
In some ways I count myself extremely lucky. I’ll be paid not to go to work for a while and to spend all day every day with my baby – a luxury not on offer to my husband, who’s the breadwinner. And, of course, many single mums have to do it all on their own – look after the baby, pay for everything and some try to juggle a job too. Then there’s the constant reminder of my schoolfriend who emigrated to Florida several years ago. She is also expecting her first baby in the coming weeks. She has to work up until the day she goes into labour and will only be allowed to take 12 weeks off work in total if she wants her job back. And Florida isn’t one of the four states that offers paid maternity leave – which if you’re interested are California, Rhode Island, Massachusetts and New Jersey and the longest any of them pay out for is six weeks.
But while I know I’ll be better off than some new mums, I can’t help but feel some trepidation about both my immediate and long–term finances and therefore my independence. I’m forever trying to work out how and when I’ll return to work, how much childcare will cost, whether we’ll be able to move to a bigger house when we need to, if I’ll be able to afford to continue paying into my pension, when I’ll be able to start saving again…
And it seems I’m far from alone in being concerned about my financial affairs. A study by pension provider Scottish Widows, has found that despite appearing confident about their short-term finances, a fundamental shift in priorities is causing 30-year-old women to grow increasingly concerned about their financial future.
It found that at the age of 30, 40 per cent of women expect their financial priorities to change in the next 12 months because they plan to start a family.
One expectant mum the company spoke to said that despite having recently bought a house, she and her partner would most likely need to move closer to her parents when they have the baby in January. ‘They have offered to provide childcare, which will be a huge financial help. Despite us both having good jobs and reasonable salaries we would really struggle to cover the cost of full- time professional childcare and commuting without my parents’ help.’
I can relate to her experience as it’s something my friends have had to do. It’s not an option for me. Both my husband and I need to be in London for work and our families are miles away – mine in South Wales, his in Aberdeen.
The Scottish Widows survey also found that more than a third of the 30-year-olds they interviewed said they felt pessimistic or very pessimistic about their long-term finances and nearly six in 10 worry about funding their retirement. Some 27 per cent had to rely on their partner to solely manage the longer-term commitments and 21 per cent had no idea to what extent their pensions, savings and investments will meet their retirement income needs.
This is something my peers and I need to get to grips with. For most of us who are starting families, the only way we will manage to climb back over the ledge that separates us from financial catastrophe and restore our financial independence, is to make sure we return to work. It’s the only way we’ll be able to fend for ourselves financially.
Yes, childcare is expensive. My bill is likely to outweigh my mortgage. But it’s an investment in my long-term career prospects and my financial health. It’s the only way I’ll be able to pay my way in life and protect my family’s quality of life – both in the near future and later in life. That’s because it will enable me to earn a living and my salary to grow, allow me to save for a rainy day and to build up my pension.
I know I’m standing at the edge of a financial precipice but by treading carefully and keeping my long-term future squarely in my sights, I think I can avoid tumbling over.
Comments