Planning is key - especially when it comes to starting a family. So, when it comes to saving money for your maternity leave, the earlier you start the better so that you’re not met with any nasty surprises along the way.
Eligible employees can take up to 52 weeks’ maternity leave. The first 26 weeks is known as ‘Ordinary Maternity Leave’ and the last 26 weeks is known as ‘Additional Maternity Leave’. The Government will pay you Statutory Maternity Pay (SMP) for up to 39 weeks of your maternity leave. This means you get 90% of your average weekly earnings before tax for the first six weeks. For the remaining 33 weeks, you’ll get £140.98 or 90% of your AWE (average weekly earnings), whichever is lower. You might be entitled to more depending on what’s written into your contract.
You’ll get Statutory Maternity Pay if you earn at least £113 a week on average and have worked for your employer for 26 weeks when you reach the 15th week before your due date.
You can use the SMP calculator to work out an employee’s maternity leave and pay.
How much money do I need to save up for maternity leave?
According to experts at the Institute of Financial Planning, parents should aim to have at least three months’ income put aside before their baby arrives. This is in case you need to take more time off to look after your baby if there are any health complications during the first few months.
Get life insurance
Having your first baby should definitely act as a trigger to get life insurance cover in place. A sensible option is to take out a policy that pays out an annual tax-free income rather than a lump sum. Your policy can be used to cover debt such as a mortgage, or to cover certain financial commitments you might leave behind, such as school fees or daily expenses. Whatever policy you choose, it can provide peace of mind for the whole family.
Shared Parental Leave and Pay
New eligible parents in England, Wales, Scotland and Northern Ireland can use Shared Parental Leave.
This allows you to share up to 50 weeks’ parental leave and 37 weeks’ pay with your partner. If you’re eligible, you can even take the leave in up to three separate blocks instead of taking it all in one go.
Are you eligible for Statutory Shared Parental Leave?
To be eligible for Shared Parental Leave, you must be eligible for one of the following:
- Maternity pay or leave
- Adoption pay or leave
- Maternity Allowance
Either you or your partner must have worked for the same employer for 26 weeks by the time your due date is 15 weeks away and must stay with the employer during Shared Parental Leave. Find out more about Shared Parental Leave here.
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