This is one of my most popular posts on Mrs Mummypenny and it was written in 2013, it is read 100 times each day! Thank you for finding me.
Jack is 9 months old today and the time has come to return to work. I am going back three months early than I could have done, but alas money has become tight and we cannot survive on the lower income any longer. I feel very lucky that I have had ten months leave with baby number three, but am happy to return to work.
Here are my tips on how to survive the salary drop whilst on maternity.
Most of us when we go on employed maternity leave get the first six weeks either full pay or 90% of full pay (statutory minimum). After then it often drops and becomes a lot harder to manage.
The statutory maternity pay is £145.18 per week or 90% of your average weekly earnings (whichever is less) (correct in 2019) & you are paid this for the first 39 weeks of your maternity leave.
If you have benefits taken as cash, like car allowance, these continue to be paid whilst on maternity leave. Also deductions from salary continue, like childcare vouchers and pension. You can stop these if you chose to, but I would highly recommend if you can afford it to not stop your pension contributions.
So here are my top tips to maximise your salary/earnings whilst on maternity leave. These apply to your actual salary and place of work.
Use as Little Holiday as Possible
Whilst pregnant and still at work, try to take as little holiday as possible. You will then have a few weeks stored up when you want to start maternity leave. You can take your holiday first, get paid full pay, then start your maternity leave after that has run out. You maternity leave must start by the day your baby is born.
I had 4 weeks holiday remaining before Jack was born. Maternity leave started on the day he was born. This is the latest day it can start.
Your tax paid as a % of your income will drop when your maternity pay drops, meaning you should end up with more of your salary. For example I dropped from a higher tax rate salary to a normal rate so my % of income paid to tax dropped.
Childcare vouchers are a tax efficient way of paying for childcare that may be carrying on during maternity leave and may be needed after maternity leave. You can save them up for use later in time, like when you are back at work and needed more childcare. There are big changes to childcare vouchers in 2017. I wrote about it in this blog post when I met up with the government department introducing the scheme and was interviewed on Share Radio.
Use your 10 KIT (keeping in touch) days. You will get paid full day rate salary for these too so stay in touch by attending team meetings etc and you will get paid for the full day, sometimes even if it’s just a 3-hour meeting! I’m currently working 1 day per week in the lead up to returning to work to ‘ease me back in’ this will mean I get paid for my full allowance of 10 days. Great at the moment as we really need the money!
Ensure you claim for any work related expenses whilst away on maternity leave, so travel to any offsite team meetings, subscriptions etc.
Write a budget and stick to it. Work out how long you’re going to take off, and how much income will be and your expenses. Don’t forget to include one-offs like holidays, Christmas, birthdays. If you need an excel budget example you can download one here.
Top Tips for Other Earnings
Sell Sell Sell
Go mad on eBay or local selling sites (you’ll find them on Facebook).
Anything you haven’t used for a year you are unlikely to use again so sell it! eBay works well for designer clothes, new things in good condition, games, electrical items. Remember the 10% eBay commission and the PayPal fees. The great thing about local selling sites on Facebook is that there are no fees, but a smaller selling audience and you’re not going to get the exciting bidding frenzy. I made £1,000 eBay during my maternity leave.
Try cash back sites. This really is free money, it’s not too good to be true. My favourite is Top Cash Back but there are others too. For any online purchase, register an account on this website. Search for the retailer and buy as normal. Your Topcashback account will be credited with the relevant cash back.
Since Nov 2012 I have earned more than £1000 cash back!! Also use it for annual ‘have to pay bills’ such as a car, house, life insurance/ switching gas/electricity providers/ new credit card/new mobile phone/broadband/pay TV.. it’s really great. It takes a few weeks to be verified but then you pay it straight into your bank account.
Make Money on Old Items
Get rid of your old cd’s and dvd’s, books and electrical items. Use the music magpie website and app on phone to scan everything in. You pack them all into boxes and a courier comes to your house to collect. £77 I received from selling 150 cd’s and dvd’s and the money was paid straight to my bank account
Why not consider writing reviews and complete questionnaires and you’ll be rewarded with amazon vouchers or sometimes even cash! I have done some reviews for channel 4 TV, an interview for a money saving website, an interview for the Telegraph. I have got a set of 20 professional photographs from the telegraph with baby 3, hubby and I for free. You would normally pay at least £500 for these style photographs and the photographer normally takes famous people photos too so they’re pretty good! I have earned about £100 worth of amazon vouchers and £100 worth of Tesco Clubcard vouchers.
Loyalty Card Points
Fully utilise Tesco Clubcard vouchers, nectar points, boots advantage points. Join all the baby/loyalty schemes. You will get plenty of freebies. During my maternity leave I got the following for free using my Tesco Clubcard vouchers – Eurotunnel ticket worth £150 / Legoland entry for 2 families (4 adults and 5 children) worth around £150 / replacing £100 worth of Denby dinner wear/ new Denby cutlery worth £100 / £300 towards diamond necklace at Goldsmiths. Total saving £800
Check Your Bills
Check you’re getting the best and cheapest rate for everything. TV, credit card, utilities, mobile phone, broadband, insurance, bank account, saving accounts. All companies offer deals to keep you as a customer, but I can pretty much guarantee that you will get a better offer switching to a new company as a new customer. I have saved a small fortune changes all these this year. £300 per annum alone by swapping my electric/gas provider. My provider is Octopus, who are great value for money, brilliant at customer service.
Grab Yourself a £50 credit towards your bill if you switch
Get a quote from Octopus to see if you can save compared to your current energy company. If you will save and decide to switch, we both get a £50 credit to our bill.