• Understand the costs of starting a family and how to budget for this.
  • Find out your rights during maternity and paternity leave.
  • Understand the financial support available to parents.
  • Understand what this means for your longer-term finances.

Read time

13 mins

Chapter 1


Read time

2 mins

Congratulations! Whether you’re starting or expanding your family, the birth of your new baby is wonderful news. We’re here to explain the financial implications of having a child and help you make any important decisions, so you can focus on what really matters.

Naturally, there are new costs involved in having a baby – especially if it’s your first. You might not have bought many nappies or baby grows before, but you certainly will now! There are also some one-off purchases to prepare for, like a pram, car seat, or crib and then in the longer term, childcare, if you're planning on returning to work.

Give yourself plenty of time to adjust your budget for these new expenses.


Help with planning and budgeting

You can use this free baby costs calculator from MoneyHelper to find out what you’re likely to need once you’ve had your new baby, and how much you'll have to pay for it.

Once you have a better idea of your new costs, you can incorporate them into your wider budget using this free Budget Planner provided by MoneyHelper. At Scottish Widows, we also offer support for your household budgeting.


Top tip

Don’t be afraid to shop around and compare to find the products that are right for you and your baby. There’s a large market for second-hand baby products, such as travel cots or highchairs – it’s worth checking online to try to find good deals on otherwise-expensive things. It is important to be careful when buying second hand goods online and be aware of scams.

Chapter 2


Read time

3 mins


You have legal entitlements during and after your pregnancy

  • Paid leave during pregnancy: During your pregnancy, you're entitled to take paid leave from work to attend your antenatal appointments. You should review your employer’s maternity and paternity pay, and get in touch with your HR department to understand both what you’re entitled to and arrange your time off.
  • Maternity leave: To get maternity leave, you need to be an employee and you need to give your employer notice. There are no restrictions based on how long you’ve been with your employer, how many hours you work, or how much you get paid. See below for partner leave.
  • Maternity pay: You're entitled to statutory maternity pay if you:
    • Earn on average £123 a week
    • Give the correct notice and proof you're pregnant
    • Have worked for your employer continuously for at least 26 weeks up to the 15th week before the week you expected to give birth

For more information about maternity pay and maternity/paternity leave, please visit the government's website .

If you're not eligible for maternity pay, you may be eligible for maternity allowance.



If you're adopting a child, statutory adoption pay is similar to maternity pay, and has similar thresholds.


Paternity leave

If your partner is having a baby, you're adopting or having a baby through surrogacy, you might be eligible for paternity leave and paternity pay.

To qualify for statutory paternity leave, you need to:

  • Be the child's biological father, adopter or intended parent; or be the child's mother's husband or partner.
  • Have worked for your employer for at least 26 continuous weeks by the end of the week before the due date, or the end of the 15th week you have been matched with your child for adoption.

The government's website explains rules and information around statutory paternity arrangements.


Returning to work

Once your maternity or paternity leave is over, you’ll usually return to work. You might be intending to change the details of your role / your contract – for example, you might plan to change your hours to accommodate your childcare responsibilities. MoneyHelper goes into more detail about your rights when you go back to work.

Your employer legally has to try and offer a comparable job, with terms and conditions at least level with the job you had before you took leave. You can claim any pay rises or improvements in working conditions associated with your role that have come in while you’ve been away.

It is worth keeping in mind that you can also take a maximum of 18 weeks unpaid leave for each child you have up until they turn 18. You can only take this leave in week-long blocks for a maximum of four weeks per year, per child. You can negotiate with your employer for more leave over and above this if you wish.

Chapter 3


Read time

3 mins

It's no secret that having a child is expensive. The charity Child Poverty Action Group estimates that, in 2020, one child will cost a couple £71,611 from birth to age 18, and will cost a single parent £97,862. If you add housing and childcare costs, these rise to £152,747 and £185,413 respectively. With that in mind, it makes sense to make the most of the help and support offered to parents.


Child benefit

You can apply for Child Tax Credit if you already receive Working Tax Credit. If you don’t, you might be eligible for Universal Credit instead, depending on your circumstances. Please visit to find out more.


Baby box

For residents in Scotland, the government provides a Baby Box to all newborns (not just your first baby). The boxes contain a range of essential items, including clothing that fits zero to six months. It’s available free of charge – your midwife can help you register for it.


Childcare costs

Childcare can be one of the most difficult costs to factor in, depending on your work commitments. There is help available for families both in and out of work via either Universal Credit or tax free childcare (if you are not claiming Universal Credit).

Universal Credit allows you to reclaim a percentage of monthly childcare costs – you just need to have paid for the care upfront and have the receipts to prove your claim. Eligibility criteria and the amount you receive can change each tax year – check MoneyHelper for the latest information.


Free school meals

Once your child has left nursery and has started school, you may be eligible for free school meals, depending on your location and circumstances.

In England, all pupils in years one and two are automatically eligible for free school meals. The same applies to pupils in Scotland from Primary 1 to Primary 5. For children older than P5 or for the rules in other locations within the UK, you can check your child’s eligibility on MoneyHelper.


Other potential entitlements

When you’re pregnant and for the twelve months after you’ve given birth, you can get NHS prescriptions and dental care for free if you live in parts of the UK where it isn’t already. Find out more from the NHS website

If you’re pregnant and have a low income, you can get additional support. In England, vouchers for basic food supplies are available from Healthy Start, and a maternity grant is available via the Sure Start scheme (subject to eligibility). In Scotland, similar services are provided by Best Start Foods and Best Start Grant.

Chapter 4


Read time

3 mins

All UK employers are required to enrol eligible employees into a pension scheme, and contribute at least 3% of their annual salary into the pension each year. To be eligible you need to earn at least £10,000 a year in that job and be at least 22 years old.

If you're eligible for maternity pay, you'll continue to receive your regular pension contributions from your employer while you're on leave. The amount of these contributions will be the same as they were before your leave began, and will be paid to you automatically (provided you don't opt-out of the scheme).

If you’re on statutory maternity pay, employers will pay the regular contribution for the first 39 weeks, while you’re still receiving the minimum statutory payments. If you choose to take the full year of leave, your employer doesn’t have to make pension contributions for the final 13 weeks when you’re no longer receiving SMP payments (unless your employment contract specifies otherwise).

After reviewing the costs of expanding your family, you might decide to adjust your financial priorities and goals – which could mean rethinking your targeted retirement age, and therefore your pension investment strategy.

One of the key considerations when you start a family is the what ifs. It may be time to revisit your will and your pension beneficiaries as a workplace pension is not included within an estate.

Your children, partner or relatives may well depend on your income, so it's also worth reviewing any existing income protection, critical illness and life insurance cover that you have. If you don't have cover, this is the time to think about creating a financial safety net to provide important support to your family in the event of an emergency.

Scottish Widows Be Money Well is committed to providing information in a way that is accessible and useful for our users. This information, however, is not in any way intended to amount to authority or advice on which reliance should be placed. You should seek professional advice as appropriate and required. Any sites, products or services named in this module are just examples of what's available. Scottish Widows does not endorse the services they provide. The information in this module was last updated on 17th August 2022.


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