Babies can arrive at the most surprising times in life. And for many people, it comes to a point where your personal finances aren’t at their best.
In fact, some women who go on maternity leave do so without any savings.
A reduced salary during this period, coupled with the costs of a newborn baby, means that many mothers have to borrow money to get by. And some end up in debt.
A parent study by financial firm Credit Karma found that a quarter of parents take maternity leave without saving any money, while 26% of women go into debt while on maternity leave.
The amount borrowed has increased by £560 since 2018, according to the company, bringing the average borrowed per parent to £2,800.
Those with student loans face the most difficult outcomes as the interest rate on these loans remains very high while they are on leave and unable to repay it.
Credit Karma said women with interest-bearing loans rack up an average of £1,770 in loan interest in just six months off.
Given the cost of living crisis, which is driving up bills like never before, this paints a dire picture for new parents.
Akansha Nath, Head of Partnerships at Credit Karma UK, said: “Women are often financially disadvantaged throughout their lives, and the responsibility of giving birth plays a huge part in this gender disparity.
“At a time when the cost of living affects most people and every penny counts, it’s more important than ever that women take advantage of any support available to them.”
These debts, even if eventually repaid, can then follow women through life, affecting their credit score and therefore their ability to purchase homes and other assets.
Credit Karma said credit scores affected by motherhood can set women back an average of £17,000 in interest over their lifetime.
If you’re struggling with maternity debt, there are resources that can help.
Step Change has a benefits checker, as well as a list of grants available to expectant parents. The website also offers free money management tools designed to help people with their finances, without judgement.