Is Going Back To Work After Having A Baby Financially Viable?

It’s the age old dilemma for many families – whether it is better for the kids for both parents to work and for the children to be in nursery, or whether it’s better for one parent to stay at home and look after the children. However, this will put their own career on hold until the children are older. There are no wrong and right answers and what one family decides is not necessarily the best decision for another family with different circumstances. However, apart from the emotional decisions involved there are some very real financial considerations around whether to continue working or not.

Career Path

One of the main reasons for going back to work for many women is a fear that if they step off the career ladder and take time out to care for their children, they may never be able to get back on it again. Legislation has been in place for decades to protect the rights of women in the workplace but discrimination is still rife and many women feel they will never be able to get back to the level they expect, especially in careers where keeping up to date with developments is essential. For these reasons, even if the additional income generated by working barely covers the childcare, some mothers feel they have no option.

Nursery Costs

There is no getting away from the fact that childcare here in the UK is among the most expensive in Europe. In London, parents can expect to pay up to £151 a week for a full time nursery place and in the rest of the country the average cost is £113. It is easy to see that for families with two or more children under school age, the costs alone can be an incentive driving them to get back into work as soon as possible. Many employers offer childcare vouchers which can cut the cost of nursery provision and for lower earners the government’s tax credits scheme helps towards the cost too. However, it is still a large chunk out of any family’s income and part of the reason why friends and family often end up helping out as unpaid childminders to ease the burden.

Child Benefit and Tax Credits

The government’s austerity measures have reduced the amount that families automatically receive from the government when they have a child. Child Benefit, which used to be given to any family irrespective of income, is now restricted to those earning less than £50,000 per annum. The tax credit threshold has been similarly reduced and has also been capped to rise at a rate below inflation. Child benefit and tax credits were never going to be enough to pay for a full time nursery place or a nanny’s salary, but the reduction in the amount paid is making finances tighter for many families.

Long Term Finances

When one parent gives up work to look after children, the temptation is to make the money stretch further by cutting back on payments for things like pensions, savings and life insurance. It’s understandable why many people feel this is a good idea and in some cases they may have no choice. However, leaving your family with one or both parents uncovered by life insurance could be storing up problems for the family should the worst happen. If the costs of these covers seem prohibitively high, shop around for a better deal or speak to a broker specialising in life insurance policies to try to buy a better deal. Make it a rule to regularly review the family finances and see if there are any savings and better deals to be had elsewhere on household insurance, grocery shopping and credit cards too. All of these measures will ease the burden of having a child.

Stuart Edge is a writer who understands that having a baby can force you to consider cutting costs in certain areas. However, he believes that you should not cut paying for life insurance as policies are designed to help you should the worst happen.


  1. Marcelino A. Harmon says

    Life insurance is a very important tool. When you use it for its intended purpose, it’s great. That means you should look to term life to cover your family protection needs. Ignore the slick sales gimmicks of guaranteed life, life insurance or children, travel and accident insurance, and whole life/universal life.
  2. says

    In cases where the policy owner is not the insured (also referred to as the celui qui vit or CQV), insurance companies have sought to limit policy purchases to those with an insurable interest in the CQV. For life insurance policies, close family members and business partners will usually be found to have an insurable interest. The insurable interest requirement usually demonstrates that the purchaser will actually suffer some kind of loss if the CQV dies. Such a requirement prevents people from benefiting from the purchase of purely speculative policies on people they expect to die. With no insurable interest requirement, the risk that a purchaser would murder the CQV for insurance proceeds would be great. In at least one case, an insurance company which sold a policy to a purchaser with no insurable interest (who later murdered the CQV for the proceeds), was found liable in court for contributing to the wrongful death of the victim (Liberty National Life v. Weldon, 267 Ala.171 (1957)).

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