SINGLE mum Gabby Capon is struggling to make ends meet on maternity leave and is dipping into savings to pay for bills. The 26-year-old, who lives in Queenborough, Kent with seven-month-old daughter Anna, was earning an annual salary of £27,500 as an operations supervisor in a recruitment firm. But while six weeks of maternity leave […]
SINGLE mum Gabby Capon is struggling to make ends meet on maternity leave and is dipping into savings to pay for bills.
The 26-year-old, who lives in Queenborough, Kent with seven-month-old daughter Anna, was earning an annual salary of £27,500 as an operations supervisor in a recruitment firm.
But while six weeks of maternity leave was paid at 90 per cent of her salary, since then she has received statutory pay of just £666 a month.
Maternity pay ends after 39 weeks but Gabby is keen to spend another four months on leave with Anna – and that means she’s quickly running out of cash with only £1,000 left in savings.
While our Cash Clinic expert, Holly Thomas, has found it hard to make cut-backs from Gabby’s already-tight budget, she does find ways to save her a few hundred pounds a year.
Plus, she recommends plenty of top tips Gabby can use to boost her income – for example, she could fill in online surveys to make extra cash – as well as looking at childcare options to keep her bills low when she does go back to work.
Gabby told The Sun: “I have used most of my savings to pay towards bills and outgoings since my daughter was born as maternity pay and benefits do not cover my outgoings. I’ve only got around £1,000 left.
“I want to take time to enjoy my daughter but be comfortable and not have to worry each month about paying the bills.
“Ideally I want to be debt-free and not run out of money during my maternity leave.”
I don’t want to have to worry each month about paying the bills
Gabby
Gabby also gets Universal Credit of £530 a month and child benefit of £86 a month.
But as she owns her own home, the Universal Credit doesn’t pay for mortgage costs, and she had to live off savings for five weeks while she waited for her first payment.
Gabby added: “My issue with Universal Credit is that it’s not enough to cover my outgoings, and it’s paid on the 11th of the month when all my direct debits come out on the 1st of the month. It’s hard to juggle everything.”
Anna’s father contributes towards big-ticket purchases but Gabby says she receives no regular cash from him.
Here’s what our Cash Clinic recommends.
THE Sun has launched its new Cash Clinic series because we want to help you, our readers, to save cash.
For some, it’s easy to get caught up with work and family life and to put our own finances on the back burner.
While for others, it needs an expert’s eye to work out where further cutbacks can be made to already tight budgets.
If you’d like our Cash Clinic expert to review your finances and to feature in our series, please email Holly Thomas at cashclinic@thesun.co.uk
Energy costs Gabby £56 a month or £671 a year with supplier Octopus.
Her bill is below the average of £1,200 a year but she can save 25 per cent according to comparison site Energyhelpline.
The cheapest deal would save her £164 a year (£13.70 a month) by going to Outfox the Market’s One Variable 8.0 plan.
Broadband and line rental with BT costs £29.99 a month.
Gabby should check every few months for cheaper deals by punching her postcode into broadbandchoices.co.uk.
Gabby could switch her energy provider to save £13.70 a month
Cash Clinic
Contents insurance at £7.20 a month with Bradford & Bingley and is good value and in line with the cheapest deal we found through GoCompare.com.
Gabby’s mobile phone bill is just £12 a month on a SIM-only deal.
Council tax is £110 a month which includes a single person’s discount.
Gabby pays £12.99 a month for Netflix, £13.20 for a TV licence and £8 a month for water.
At the same time as taking out her mortgage, Gabby took out an income protection insurance policy – a smart move as a single income household. She pays £13.17 a month, which represents good value.
Gabby took a variable rate mortgage at 3.24 per cent with Newbury Building Society on her two-bedroom ground floor flat she bought in August 2018 through shared ownership.
She borrowed £63,500 which bought her just under a 40 per cent stake of the property valued at £163,000. The mortgage and rent combined come to £550 a month.
On her current deal, if interest rates are hiked, her monthly mortgage repayments will rise too.
But Gabby is unlikely to be able to switch to a cheaper fixed deal while on maternity leave, so she’ll need to look at this once she’s back at work.
She should consider a fixed rate deal to give her peace of mind that her repayments cannot rise. She might get a very similar rate of interest which means she won’t make any savings today – but should interest rates rise in the future her payments will be protected.
Gabby has to pay service charges of £100 a month on her new build property. These cover buildings insurance, lighting and heating as well as maintenance of communal areas and are not negotiable.
Gabby does her shopping at Aldi and Tesco. She is vegan and looks for deals on fresh fruit and vegetables for herself.
Aldi, for example, runs a “Super Six” deal with selected fruit and veg costing 35p each.
Anna eats the same as Gabby at the moment. Gabby’s grocery bill includes nappies and baby items that she gets while on offer. She also buys supermarket own-brand baby items.
Gabby splashed out on a new car in October. Her new Audi Q2 is costing her £359.18 a month with the loan lasting three years – having only made three payments she has 33 months to go until she’ll be £359 better off each month.
The interest rate on the finance is 6.3 per cent.
She also has a credit card debt of £590 that she built up after having to buy a new tumble dryer when her old one packed up, and following Tesco shops put on card when she ran out of money in her current account.
This debt is on a TSB card charging 19.95 per cent and she repays around £40 a month.
Gabby has shrewdly pipped us to the post and already applied for a Tesco 15 month All Round Credit Card offering an interest-free balance transfer period with a fee of just 1.49 per cent.
She plans to retain the £40 a month payments which means she will clear the debt in 15 months and cover the £9 transfer fee.
Car insurance with Admiral costs Gabby £44.31 for her Audi Q2. A look on GoCompare.com shows that she’s got a better value deal than is currently being offered.
Gabby’s fuel bill comes to £120 a month from errands around town and trips to the supermarket during the week.
Gabby pays £10 a month into a children’s savings account for Anna. The account is paid into a Kids Monthly Saver account with Halifax where the money earns 4.5 per cent for 12 months.
After this it will be moved to a Kids Saver account paying just 2 per cent, so Gabby should make a note in her diary to see if there’s a better paying account when the year is up.
Alternatively she could consider a stocks and shares Junior Isa.
Gabby could boost Anna’s savings by switching to a Stocks and Shares Isa
Cash Clinic
Investing £10 a month from birth to the age of 18 means that Gabby could hand her daughter an account worth £3,545, based on 5 per cent growth and after investment charges, according to calculations by AJ Bell.
This compares to around £2,377 if she were to stick with a bank-based savings account.
Should she want to invest for her daughter, she should use comparetheplatform.com to work out the best place to set up the account.
Gabby is extremely organised with her finances – no mean feat with a new baby. That said, we’ve managed to save her £164 a year on bills.
Plus, there are a number of ways Gabby could raise some extra cash.
Firstly, plenty of banks are offering rewards for switching current accounts at the moment, for a one-off payout.
Gabby can bag £175 by switching to HSBC or £100 in cash by switching to First Direct.
For a more regular income, she could also use the time at home while Anna is napping, to do some paid work online.
We’ve mentioned this to previous Cash Clinic case studies, but there’s good money to be made by filling in online surveys.
Some online surveys operate a reward scheme where you earn points for surveys completed that can be exchanged for shopping vouchers at the likes of Amazon and John Lewis.
Filling in online surveys is a good to make up to £15 a time
Cash Clinic
Others pay up to £15 in cash for each one, which typically take around 30 minutes. Try Crowdology, i-Say, LifePoints, Survey Compare, and YouGov.
There are also agencies that match candidates with mystery shopping jobs, such as JKS Mystery Shopping and Retail Maxim. Some pay in cash, others let you keep all the shopping.
While Gabby is running errands she should look out for jobs advertised in shop and office windows. Uploading a picture to the Job Spotter smartphone app from recruitment firm Indeed.co.uk can earn Amazon vouchers – always handy.
For each post you get points worth between around 80p to £1.20 in vouchers.
Gabby should also contact her employer about “keeping in touch days”.
New mother’s can agree to work for their employer for up to ten days without interrupting maternity leave or pay.
The extra money will come in handy – as long as Gabby can find a family member or someone else to look after Anna for a day here and there.
Long-term, Gabby is within her rights to make an application to the Child Maintenance Service which can assess and collect the child maintenance payments from Anna’s father on her behalf.
Elsewhere, she should open an account with a cashback website and earn cashback on her regular spend. At Topcashback there are often savings to be made on purchases at supermarkets as well as The Early Learning Centre and The Works – great for kids.
Gabby should also consider using a budgeting app to help her stay on top of things for the future. She is incredibly organised, but later in the year she might be glad of the help as she juggles going back to work and being a single mum.
A brand new app called Snoop is expected to launch this year that could suit her down to the ground.
She can link it to her bank accounts and credit cards and it will monitor every bill to see if there are better deals to be had on everything from utilities to subscriptions.
When Gabby goes back to work her salary will resume, giving her more money coming in each month – but she will have childcare costs to think about as her close family are all still in full-time employment and aren’t able to help look after Anna fulltime.
An au pair could save Gabby hundreds on childcare costs
Cash Clinic
Nurseries in the area cost around £40 a day – which if she returns to work full time will be £866 a month.
Alternatives include a nanny share or childminder that can work out cheaper if she can find another family that want similar hours.
The government help site estimates a childminder costs £5,876 for the year – £489 a month – though this is based on 25 hours a week.
There’s another option. Gabby has a two bedroom flat. If she would be willing to share a bedroom with her daughter then she could look into hiring an au pair to look after Anna.
Under such an arrangement, an au pair would live in the second bedroom and Gabby would only pay her a small amount for caring for Anna while she’s at work – Gabby also speaks fluent French, which could suit her well if she finds a French au pair.
Specialist website Babycentre.co.uk says an au pair costs from £3,640 a year – £303 a month. Again this is based on 25 hours a week.
There would be increased living costs to consider, such as losing the council tax discount and food bills. But the savings could still be significant.
Gabby should find an au pair through a reputable agency listed with the British Au Pairs Trade Association.
When it comes to housing costs, Gabby should check if she’s eligible for the government’s Support for Mortgage Interest scheme – although bear in mind this is a loan that she will eventually have to repay.
The next four months are going to be tough. Gabby could, of course, opt to return to work a little sooner if things get too difficult financially. If her employer would allow, she could return part-time to start with.
Gabby said: “I’m grateful to Cash Clinic for going through my finances with a fine tooth comb.
“I will look into the different ways to make a bit of extra cash while I’m off work. And I’m going to sign up to a cashback website.
“I like the idea of an app that can help me run my money more efficiently. When it comes to childcare I will explore all the options, including an au pair.
“There’s the chance that Anna’s father will help out with the cost of childcare – but I can’t rely on that.”
