As UK childcare costs account for 26 per cent of household income, fintech entrepreneur Mel Faxon explains why motherhood means that women can’t have it all. 

Mel joins me from her London coworking space. “Being able to walk over to someone’s desk, especially when you’re in a start-up, makes such a huge difference. I can’t wait until we have an office” she candidly admits.

Faxon met Siran Cao, her now co-founder, in 2019. As two millennial women, they started looking at why we often refuse to think about our bodies and careers on the same track. A few coffee conversations later, they decided to make a change in the way we perceive the idea of starting a family and they created Mirza, a care now pay later product that aims to distribute the costs of childcare over time and close the gender pay gap.

“When we first started, we were looking at the causes of the motherhood penalty and the decline in earnings that a woman sees after she has a child,” Faxon says. “This is one of the biggest contributors to the gender pay gap and if you don’t have good parental or maternity leave, it can hurt your career acceleration down the line.”

Taking time out of the workforce after stepping into motherhood is something that women naturally do, mainly because they can’t afford the increasing costs of childcare. However, the long-term financial implications are a lot bigger than we might think, the entrepreneur adds.

“We wanted to tackle this issue by launching a product that helps women keep working and that distributes the [childcare] costs over time to when they have higher earning potential,” she explains. “We want to allow women to take this zero-interest financing mechanism through their employer without having to choose between family and career.”

Mirza was initially aimed for women, but the two co-founders soon realised parenthood shouldn’t be one-sided.  “We wanted a family-focused financial planning product that helps parents understand what the parenthood penalty looks like and what taking unpaid leave looks like,” Faxon says.

“Once we realised that this is not just about women, we decided to shift [our idea] and make it much more gender neutral for both men and women.

“We constantly hear things like ‘I don’t want to have to choose between family and career’ or ‘women can have it all’. But right now, it’s unrealistic to think that women can have it all unless they have a lot of privilege and support.”

With one in three childcare centres shutting down in the US and over two million women dropping out of work during the pandemic, the need for a change seemed even more imperative.

“Covid has been a really good spotlight,” the co-founder adds. “This great resignation really highlights that people aren’t going to go back to work in places where they don’t get the support that they need and it also shows that care is the future of work. If we don’t support parents in their childcare needs, they are not going to be able to participate in the economy and help it grow.”

But why is financial planning so important in this process?

“Everything gets so disorganised when you have a child,” Faxon explains. “You don’t know where to go and you feel like you don’t have a balance between your career, what you were doing in the past and your current life.

“Financial planning helps people be a little bit more proactive. Having a child, then looking for childcare and realising what the expense is going to be, is very much a reactive approach that can mean that one of the parents would have to stay home.

“We want to help parents start these conversations ahead of time to help facilitate that dialogue around parental leave policies and statutory leaving,” she continues. “That would give them a sense of control and would help them navigate that with their employer.”

Mirza is purely tech-driven and is able to source some of the expenses that are coming up and taking your income into account, it will estimate the upcoming cost of care for the coming five to ten years. It is already available in the US, mainly because the data used was based on a US model.

“Both my co-founder and I are American. So, it felt a little bit more genuine for us to tackle those problems there,” Faxon says. “But our whole team is here, in London and we would love to expand it to the UK in a few years.”

Mirza’s five-year goal is to shape parental leave and have over two million families using the service. “Our vision is to become almost like a neobank of offering more tailored financial products for families ,” the co-founder adds.

“Women shouldn’t have to take that financial hit right when they have their first child and I hope we will change that.”

To find more about Mirza visit heymirza.com.