Abigail Wood is Public Affairs Manager for the UK’s largest charity for parents, NCT.

Last week brought good news for many parents with the government’s announcement that they would be eligible for up to £2,000 per child to help with the ever-rising costs of childcare. However, the budget did nothing to tackle another strain on parents’ finances: the shockingly low level of maternity and paternity pay.

After 12 weeks on 90% of weekly earning, statutory maternity pay falls to only £136 per week. This is around £100 less than you’d earn with a full-time minimum wage job. Having a baby is very special time yet today many new parents spend the early months of their child’s life distracted by outstanding bills and growing debts before they even start thinking about childcare costs. 

NCT’s latest research with the think-tank IPPR  found that under government plans to limit increases to maternity and paternity pay by 1% parents will lose around £224 throughout the course of their 39 weeks parental leave. This is enough to pay heating bills for two months - a significant contribution to family outgoings when every penny counts. Parents at home with a new baby need to provide a comfortable level of heating during the day which can cause their energy bills to soar.

The research also showed that these new plans will hit the poorest fifth of families hardest. On average, they will lose over three times as much in proportion to their income (1.9% of their net weekly income, compared to the richest households, who will lose 0.6%). If the government is serious about valuing families and the contribution that parents make then they need to increase maternity and paternity pay in line with inflation.

This week NCT has heard from families surviving on these low rates of maternity and paternity pay. Some have told us that they are getting into debt in order to buy basics and make ends meet, others are forced to return to work before they feel ready to leave their baby. One family who contacted us told us have a five year old and a new baby. They don’t live an extravagant lifestyle, both mum and dad work and they live in a small flat in Bolton. Tax-free childcare will help them meet the cost of the afterschool club their five year old attends but because her employer only offers statutory maternity pay she will have to return to work when her baby is 14 weeks old – far sooner than she’d like to.

NCT has also raised concerns that limiting the annual increase in maternity and paternity pay will reduce further the chances of dads taking up the much-welcome offer of shared parental leave. It’s an excellent policy, but unless it is backed up with better pay, many couples simply won't be able to afford to take advantage of it.

So whilst the announcement of more support with childcare costs was a welcome move, if the government is serious about valuing families and supporting them to give their children the best start in life they must take action address the appallingly low rate of statutory maternity and paternity pay.