Our cost of living survey: the results

by Kate Moran, Maternity Action Senior Policy Officer

Why we wrote this report

Every day it seems that predictions about the impact of the cost of living crisis get worse and worse.?For the poorest families particularly times are hard and look set to get harder as inflation continues to rise and energy prices increase beyond our worst fears.?Just days ago?it was reported?that the UK inflation rate had risen to over 10% for the first time in 40 years.?The Bank of England has predicted that inflation will peak at just over 13% in October, but many think that this is optimistic and the reality may be even higher.

In contrast, wages are rising by a maximum of just 5.2% this year (according to the Office for Budget Responsibility), with benefits increasing by just 3.1%. The costs of day to day living are far outstripping the rises in wages and benefits leading ever more people into poverty.

The?current basic rate statutory maternity and parental pay from April 2022 is only ￡156.66 per week. It equates to just 47% of the National Living Wage (for a 35-hour week at the adult rate of ￡9.50 per hour). It is clear that the failure of maternity pay to keep up with the dramatic increase in the cost of living is driving more and more pregnant women and new mothers into poverty and financial hardship at time when they need their income to keep up with the costs of a new baby.

It was against this background that Maternity Action carried out a survey earlier this year to look at the financial impact on women who had recently taken a period of maternity leave from their workplace.?Nearly a thousand women responded to our survey – an indicator itself of the huge impact of the drop in income that women face when they take a period of maternity leave. You can find the full results in our report?Cost of Living on Maternity Pay.

Here are some of the main findings from our survey.?As well as the immediate financial problems that the sharp drop in income causes, women also worried about their future finances ranging from the inordinately high costs of childcare in the UK when they did return to work, to the long term impact on their future income and pension – the “motherhood penalty”.

But as we clearly show below, it is the voices of the women themselves that shows the real and harmful effects that low rates of maternity pay in this country are having.

Financial worries

While daily household expenses have increased the dramatic drop in income experienced by households meant that many were struggling to pay for the basic necessities.?Combined with the increased costs that a new baby brings this was leading to real financial hardship.?Nearly two-thirds of respondents said that they worried a lot about money while they were pregnant or on maternity leave and a further third said that they sometimes worried.

“I absolutely worried.?I was only entitled to SMP and it is just not enough to live on.?Your wage drops dramatically but you still have the same amount of bills as before (rent/mortgage, gas and electricity, petrol, food etc) plus a whole new baby to pay for, nappies, formula (if formula feeding), clothes, more washing etc.?It’s ridiculous that the government thinks SMP is enough”.

Stress and mental health

Respondents reported a negative impact on both their and their partner’s mental health and the detrimental effect on their relationship due to the constant concerns about finances.

“It has drawn a wedge in mine and my partner’s relationship.?We struggle to make ends meet and then fight constantly and worry about how we’re going to get the money to pay our bills.?My mental health has seriously deteriorated and if it wasn’t for me having a baby I probably would’ve harmed myself by now”.

Borrowing and credit

Just over half (51%) said that they had to rely on their credit card or had to borrow money (for example from friends or family) while pregnant or on maternity leave.?Many reported having saved up for a long while – often for years – before having a baby in order to cushion the loss in income.?But despite having planned carefully, many told us that their savings were quickly used up and they were still forced to borrow or take out credit.

“I have two children and both maternity leaves have been SMP only.?In order to cope with the drop in take home money I have been required to eat into all our household savings, borrow from family and still increase credit card debt in order to get by.?It was a horrible worrying time and I will be recovering financially for many years”.

“I started worrying when I went down to half pay.?I knew I couldn’t afford to do it but I weighed up spending precious time with the baby against buying all my food on credit cards.?I’m paying heavily for that decision now”.

Paying for the essentials

Many had faced challenges in being able to buy the things that they needed while they were pregnant or on maternity leave.?Nearly one in six (17%) said they had struggled a lot to do this and over half (53%) said that they had sometimes struggled.?Respondents reported having to choose between heating their home and eating, with many parents unable to afford to eat healthy meals or some days not even eating at all themselves.?These worries were a constant source of fear and distress.

“Mat pay is not enough to survive.?I saw myself without meals and panicking about having enough money.?I was turning lights off and heating to the baby’s room”.

“After the second day of every month, I panicked about affording food and electric”.

“The increase in fuel and household bills is terrifying and I’m scared to spend money”.

Forced to return to work early

Over half (52%) of respondents who were returning to work said that they had returned earlier than planned because of money worries. Not only did mothers find this stressful but it also impacted on their plans to continue breastfeeding their baby.

“Returning after six months as I can’t afford to drop to SMP.?I’m not mentally or emotionally ready”.

“I’m disappointed to have to return to work so soon after having my baby for financial reasons as it means I won’t be able to feed her naturally.?I will have to move from breastfeeding to bottle feeding which reduces the health benefits to my baby”.

What needs to change

Maternity Action is urging the government to take immediate steps to ease the pressure new mothers are facing by:

• Increasing the flat rate of Statutory Maternity Pay to the national minimum legal wage for a 35 hour week (￡332.50 at April 2022), and that Paternity, Shared Parental and Adoption Pay are also increased to the same level.
• Ensure Maternity Allowance under Universal Credit regulations is brought into line with Statutory Maternity Pay, so that women receive the same benefits payments irrespective of the type of maternity pay they receive.
• Extending eligibility for Sure Start Maternity Grant to second and subsequent children, mirroring entitlement to the Scottish Best Start Grant.
• Raising the income threshold for Healthy Start payments to enable women in receipt of Statutory Maternity Pay to access the scheme.
• Improving access to advice on maternity rights and benefits by integrating this into maternity services. This will support women to retain their jobs when they have their baby and ensure that women can access their full maternity pay and benefits entitlements.

Maternity Action’s work does not end with the publication of this report.?We will be working closely with UNISON and other unions in the coming months to raise awareness of the situation that mothers on maternity leave are facing and campaign for the changes so desperately needed.?We know that things are set to get worse, not better, for women on maternity leave.?As one respondent so neatly summed up:

“When the choice of raising children or returning to work is no longer a choice but an essential decision in the life of our family you know something is wrong.?The role of a mother/father is a FULL TIME commitment, and mat leave is not a “break”.?To survive on the pittance we are given is insulting, forces women especially to return to work often earlier than they want…There’s something wrong there indeed”.