Recently issued figures estimate that the expense of rearing a child starting from arrival to twenty one years old might be up to £200,000. We will assume that you’re in an IVA turn out to be pregnant. The issue of attempting to keep up your IVA during your pregnancy and especially following the arrival of your baby can be a difficult one. The unquestionable enjoyment of getting a child will have to be tempered with the inescapable fact that financial difficulties will most likely escalate. Yet, plenty of borrowers in IVAs have effectively overcome the issues presented in these kind of situations.
The first thing to recognize is that your IVA will not automatically fail just because you will be having a baby. Clearly, your financial position will alter – a few times – as a result of your pregnancy, at the time of the birth, in the months after the birth and when you return to work, in the event that indeed you do propose to return to work. For a start, your earnings will decrease when you stop working. This of course would depend on the terms of your employment. Your contract may possibly provide for your total salary or a sizeable proportion of it to be paid out while you are on maternity leave. However, for many people, this will not be the case.
If you take maternity leave of nine months then your weekly maternity pay for the first six weeks of absence consists of 90% of your average gross income. Let us say that the amount you end up with is £X gross per week. Your average gross income is what you earned in the eight weeks immediately prior to the commencement of your maternity leave. For the outstanding thirty three weeks of maternity leave, your weekly gross income is the lesser of £X or £124.88, currently the legal maternity allowance paid by the government. Be aware that these sums are gross and are subject to taxes and national insurance deductions. As outlined previously, some employers have solid other schemes relating to maternity leave but the norm is as outlined above. When and if you get back to the job then your income will typically return to what you had been getting before your maternity leave. Your earnings may also improve if you become eligible to get tax credits or if you receive an increase in your existing tax credits. You should apply for these without delay if there is any reduction in income. Tax credits will be paid out retrospectively to the time the application is made so it’s vital to claim right away. Child benefit is also payable immediately after your child is born so it is important to claim as soon as practicable.
Now let’s look at expenditure. Your various everyday expenditures may increase or lessen however , in general your expenses will rise. For instance, the cost of foodstuffs will grow since you have another mouth to feed and of course heating expenses are very likely to go up. On the other hand there may be a temporary decrease in the cost of transport to work. You will sustain the additional costs of clothing and diapers for your child. When the duration of maternity leave is over, various other new expenses may kick in such as the expenses of a crèche or other sorts of childcare, if you go back to employment. If you have extended family who are able to assist, some of these new costs can be perhaps lessened to some extent.
There is no need to be anxious if you find yourself pregnant. Advise the supervisor of your IVA promptly so that your IVA can be tailored to your changing circumstances and be properly supervised. It may be that your supervisor will approve a short-term payment break or reduction in payments or otherwise look to change the conditions of your IVA by agreeing variation plans with your lenders. Although creditors have the final say, having a baby should not be a obstacle to a successful ending of your arrangement. To adapt an old expression – ‘where there’s new life, there’s hope’.