Having a Baby: Your Financial Checklist

Maternity Pay: What You Are Entitled To

Statutory Maternity Pay (SMP) is paid for up to 39 weeks: 90% of your average weekly earnings for the first 6 weeks, then £187.18/week (or 90% of earnings if lower) for the remaining 33 weeks. To qualify, you must have worked for your employer for at least 26 weeks by the 15th week before your due date. If you do not qualify for SMP, you may get Maternity Allowance (£187.18/week for up to 39 weeks) via HMRC. Check your employer — many offer enhanced maternity pay above SMP.

"To qualify, you must have worked for your employer for at least 26 weeks by the 15th week before your due date"

Paternity and Shared Parental Leave

Statutory Paternity Pay is 1 or 2 weeks at £187.18/week (or 90% of earnings if lower). Shared Parental Leave (SPL) allows parents to split up to 50 weeks of leave between them — the mother must end maternity leave early to activate it. SPL pay matches SMP rates. Some employers enhance paternity pay significantly — check your contract. The second earner taking leave is often the most financially impactful decision, especially if one parent earns significantly more.

Benefits to Claim Immediately

Claim Child Benefit as soon as your baby is born — even if you will repay it via the High Income Charge. It builds National Insurance credits for the lower earner. £26.05/week for your first child, £17.25 for each additional child. Check your entitlement to Universal Credit if your household income drops during maternity leave. Free NHS prescriptions and dental treatment are available throughout pregnancy and for 12 months after birth — get your FW8 form from your midwife.

The Real Costs to Plan For

The average first-year cost of a baby in the UK is approximately £6,000–£11,000. Major costs: pram and travel system (£300–£1,500), cot and mattress (£100–£600), car seat (£80–£400), feeding equipment, clothing (buy secondhand where safe to do so), nappies (£50–£80/month). The biggest ongoing cost by far is childcare — average £1,200–£2,000/month full-time in England. Budget for this before committing to a return-to-work date.

"The average first-year cost of a baby in the UK is approximately £6,000–£11,000"

Childcare Costs and Free Hours

All 3–4 year olds get 15 free childcare hours per week (term time). Working parents of 3–4 year olds get up to 30 free hours. Free hours are now available for eligible working parents from 9 months old. The Tax-Free Childcare scheme tops up your childcare account by 20% — for every £8 you pay in, the government adds £2, up to £2,000/year per child. Employer-provided childcare vouchers (legacy scheme) may still apply if you enrolled before October 2018.

Protecting Your Family Financially

Having a child makes financial protection essential. Life insurance: term life cover paying off your mortgage and replacing income for 18+ years. Policies for a healthy 30-year-old cost from £10–£20/month. Critical illness cover pays a lump sum if you are diagnosed with a serious illness. Income protection replaces your salary if you cannot work through illness or injury — most important for self-employed parents. Write your life insurance in trust so the payout bypasses your estate and reaches your family immediately without probate.

Starting to Save for Your Child

A Junior ISA allows up to £9,000/year invested tax-free for your child. Opened at birth and invested in a global index fund, even £50/month could grow to approximately £22,000 by their 18th birthday (at 7% annual growth). The money is locked until they turn 18. Grandparents can also contribute. Even small regular amounts make an enormous difference over 18 years thanks to compound growth.

"A Junior ISA allows up to £9,000/year invested tax-free for your child"

Updating Your Financial Admin

After birth, update: your pension nomination form (expression of wishes) to include your child or partner, your will if you do not have one — dying intestate with a child is a serious risk, your life insurance beneficiaries, and any employer death-in-service benefit nominations. If you are not married, your partner has no automatic right to inherit or make medical decisions — a will and lasting power of attorney become even more important.