I’m 34, on £26k and about to move from a permanent job to a 12-month contract – how will this affect my mortgage, pension and ability to get maternity pay?

I’m worried I’ve been too hasty! I’d been planning on using my pay rise to pay for house renovations but maybe I should be putting it all into savings or a private pension instead. Would love some advice.

MY ACCOUNTS

Current account: £149

Savings account: £3,500

MY INCOMINGS

Annual salary: £26,300 gross; £21,548 post deductions

Monthly wage: £2,192 gross; £1,796 post deductions

Any other incoming payments: £0

MY OUTGOINGS

Mortgage: £450

Bills: £290 across shared household bills, and personal bills including my phone bill, petrol, subscriptions etc

Other: I try to put £200 a month into savings

Splurges: Lately it’s been house stuff – we’ve just bought some new tiles for the bathroom.

Weekly budget: I need to start budgeting!

MY DEBTS

Just my student loan

MY MONEY THOUGHTS

My worst money habit: I try to be careful with money, but I feel like I always underestimate what I’ve spent so I get a shock when I check my account balance.

My biggest money worry: Our financial security.

My financial hopes for the future: That we’ll be able to afford to start a family. And one day have a fully renovated house!

Current money mood: ???? ???? ????

The mortgage question
Before we get into your questions, I’m going to preface everything with ‘check your contract’ – this is vital to understanding where you stand with your new employer #KnowYourRights. With that said, let’s look at the mortgage question first. In the eyes of a lender, you’re what they’d call a type of ‘contractor’, which is similarly to a form of self-employment. It is the case that lenders can be a bit particular when it comes to contractor mortgages because your future is less certain in their eyes. They ideally want a track record of renewed contracts. Your best bet is to get some advice by speaking to a mortgage broker. They’ll be able to find the best deal for you and walk you through the requirements for remortgaging.

Your maternity pay rights
Even though you’re on a contract, you will still qualify for Statutory Maternity Pay so long as you have been working for this same employer for 26 weeks leading up to the 15th week before the baby is due. In short, you can’t start a job pregnant and receive maternity pay. If your employer offers an enhanced maternity package – you should be eligible for that too but you must check your new contract ASAP to double check.

Your maternity leave rights
You also have the same right to statutory maternity leave as a permanent employee. Of course, one of the big worries is that upon announcing a pregnancy, your employer wouldn’t renew your contract. This is unlawful if the reason for the non-renewal is related to pregnancy, childbirth or maternity leave but there is no obligation to keep you on so long as they have a ‘fair reason’. The reality is, unlawful doesn’t mean it won’t happen *eyeroll*. Being on a fixed term contract does leave you with less certainty so it’s even more important that you know your rights and have a clear plan (and back-up). I’d also suggest getting some advice from ACAS.