/ Parenting

Do you know how shared parental leave works?

In April 2015 the Shared Parental Leave (SPL) scheme was announced. Last year, my husband and I decided to take it. This is my experience, what’s yours?

My husband and I are a very modern couple. He’s always been keen that if we were lucky enough to have children, he would take an equal role in raising them.

So when, in April 2015, a scheme called Shared Parental Leave (SPL) was announced, we were both delighted. It allows mothers to share part of their statutory maternity leave and maternity pay entitlements with their partner.

The idea was touted by the (then coalition) government as being great for fathers, children and whole families. But we didn’t need convincing. Straight away, we knew that we’d be taking SPL if we became parents.

Three years later we were expecting our first baby, planning to take six months off each – first me, then him. As little people grow rapidly and come with a surprising amount of stuff, we were also in the process of upgrading from our one-bedroom flat.

Our experience of SPL

Despite our fears, the reaction to our decision to take SPL has generally been brilliant. My husband’s employers are very supportive, while friends and family agree it’s a fine thing.

When trouble arose, it was from the most unexpected of quarters – a mortgage lender.

When we applied for the mortgage we were advised that our impending bundle of joy was unlikely to be an issue.

The lender would want to know our plans for leave and childcare, but we had savings and were in a good position. After all, many lenders are reasonable and rightly view a lower income from maternity leave or SPL as a very temporary blip in the family finances.

All fine in theory. Unfortunately it seems the individual underwriter assessing our application had little grasp of how SPL works.

They made an error in their calculations, resulting in a demand for us to have a truly eye-watering savings pot to cover our baby’s first year. When we didn’t have enough, they rejected the application.

It was my knowledge as a financial journalist which enabled me to do the sums and prove that they’d got it wrong. Eventually they did offer us a mortgage. However, anyone without the confidence or skills to challenge such a rejection would have been up the proverbial creek without a paddle.

A lack of awareness?

We were disappointed that a government scheme more than three years old – and with official guidance clearly published online – still isn’t fully understood by some financial professionals.

But then it’s likely many of them may not have encountered it before as take-up of SPL is tiny. Recent figures suggest only 1% of eligible parents are taking it, with the gender pay gap touted as one possible reason why fathers are reluctant to face a drop in income.

The government has now launched a campaign to promote SPL as an option.

Do you have any experience of SPL? Have you taken it, or do you know someone who has? What reaction did you receive from employers, colleagues and financial firms?

Did the financial constraints or the complex eligibility rules exclude you from taking it? Let me know in the comments.

Comments

If mortgages are turned down because of SPL, presumably the companies should be reported to the FCA, either by those involved or organisations such as Citizens Advice and Which?

Dealing with the gender pay gap may prove a greater challenge to resolve.

It is surely up to a lender to decide whether those applying for a loan have the ability to repay it, not the borrower to have a right to demand a loan? For the protection of both parties. In this case one lender reversed their decision in the light of evidence provided but I presume the applicant could have also gone to other lenders who were better informed. It is wise to shop around for mortgages in any event.

Taking a 6 month break on minimal income would impact on many people’s ability to handle mortgage repayments in the short term. In that event waiting 6 months until back on full employment (and income) might be reassuring for the lender.

I would not assume that companies are always right and in this case Faye said that an error had been made in a calculation.

Hopefully we will have some input from those who have used the SPL scheme.

Whether Malcolm’s final sentence would apply depends on which parent would be losing the greater amount of income and in which order, and over what period(s), they took their leave.

Under the SPL scheme the parents can share up to 50 weeks of leave and up to 37 weeks of pay between them. Leave can be taken in blocks separated by periods of work, or can be taken all in one go. The mother and father can also choose to be off work together or to stagger the leave and pay [e.g two weeks on, two weeks off].

This scheme should change the attitude of employers who tried to avoid recruiting young women since new fathers can now apply for leave just as easily. I am surprised the take-up is so low.

It’s still not seen as normal for men to take time off work to look after kids, John. When we were young, it was normal for the man to work and the woman to look after the home, but consumerism put paid to that. We live in a society where both parents have to go out to work for their kids to be looked after by other people. Maybe SPL will help parents to get to know their kids and perhaps learn that there are more important things than money in this world.