Baby Blues: Maternity debt problems for poorest
Low-income families are buckling under the financial pressure of a new baby.
Almost 40,000 (37,887) parents sought our help last year and two-thirds of the 1,745 who cited pregnancy as the reason for their debt problem earn less than £20,000 a year.
We believe that those earning less than £10,000 a year are particularly vulnerable, and are earning less money each month than they need to cover basic living expenses. Last year, they had a monthly budget deficit of £54. This group has very high debts in relation to their income, with average debts last year of £8,593.
The situation is slightly better for those earning between £10,000 and £20,000 as last year they had an average of £16 left over each month after paying for living expenses.
While this means that they are able to cover the cost of their living expenses, the charity is concerned that this leaves them in a very weak position to repay their average debt of £12,384.
Our female clients tell us that it is the drop in income when they go on maternity leave and often only return to work part-time, if at all, that causes the problem more than the costs of feeding and clothing a baby. This is particularly acute for those on low-incomes who might want to return to work full-time but whose wages do not cover the cost of full-time child care.