New parents getting into debt to cover costs

More than half of parents have got into debt to cover the cost of maternity or shared parental leave.

According to research by Intuit Credit Karma, 59% of parents have borrowed money, taking on an average debt of £2,658.

Many of these people are staying in debt for several years, as one in four are still repaying what they owe by the time their child starts school.

And more than a quarter (24%) have had to go back to work sooner than they’d like in order to pay off their debts.

The survey of 2,000 people across the UK also highlighted a gender divide between mums and dads.

More than one in five (21%) men taking shared parental leave had changed jobs to get better parental benefits.

By contrast, less than one in ten (9%) of women taking maternity leave had done the same.

Couples encouraged to plan ahead

Akansha Nath, general manager (international) at Intuit Credit Karma, has encouraged people to plan ahead where possible to cover their costs.

“Setting aside savings and carefully budgeting for your reduced income and unexpected expenses can help alleviate financial strain,” she said.

According to the study, 81% of parents planned for the drop in income and added costs that come with parental leave, saving almost £5,000 on average before taking time off work. 

But 13% were found to have not thought about saving any money until it was too late.

Support for new parents increasing next month

Statutory maternity, paternity, adoption and shared parental pay is being increased to £187.18 per week from 6 April.

And depending on your individual circumstances, you could get:

• universal credit
• child benefit
• a sure start maternity grant
• healthy start

We can help

If you’re struggling to make ends meet after having a baby, then we’re here to give you practical and impartial money advice.

We can help you with:

• finding out what benefits you’re entitled to
• working out a household budget
• finding the right debt solutions