Returning to Work after Maternity Leave? Prepare for Financial Loss

Financial hit for mothers returning to work after maternity leave

A recent report by the Association of Accounting Technicians has revealed that the average mum returning to work after maternity leave aged 18 to 44 will end up suffering both financially and in her career prospects.

In many cases they are having to accept more junior roles and less money than they were on before they started their maternity leave sometimes as much as 20,000 less, but on average around 9,500 less. This is because they need to find a position that fits around their requirements which can prove tricky.

The report doesn't Clarify why Women Returning to Work Face Cuts

However, the report does not go into detail as to the exact reasons behind these reductions in salaries for women returning to work after maternity leave. It could be because they are working fewer hours rather than because employers are being inflexible and forcing them to do more menial lower-paying jobs.

But if bosses are responsible for the situation, they are not capitalising on the investment which they made in these workers before they fell pregnant. This could amount to thousands of pounds worth of recruiting and training in some cases.

65% OF Women Surveyed Earned Less after Maternity Leave

According to the report, 65 per cent of the women surveyed earned less than they did before becoming mums. At the same time, 63 per cent stated that they now worked fewer hours. The report did not state what the crossover or correlation was between these two groups. However, when some of the women gave more detailed feedback, almost 75 per cent felt they were doing jobs that they were over-qualified for and around 33 per cent stated that their current job was 'menial' and very different from their pre-children career.

The Government has not helped the situation

Although they say they want to boost the economy by getting more women to return to work after maternity leave, they have cut the highest level of support available through the childcare element of Working Tax Credit from 80 per cent of costs to 70 per cent. This has affected over 40,000 families to the tune of hundreds of pounds a year.

Parents who are working and therefore do not get tax credits have also been affected by Government cuts to the childcare vouchers scheme, which allows them to pay the cost of nursery care through pre-tax income.

Before the cuts, higher rate taxpayers could be entitled to 55 per week of vouchers. But from April last year that amount fell to 28. And just to top it off, the Daycare Trust data from this year has shown above-inflation increases in nursery care costs.

Written by Rachael Clarke of Circle Square

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