Before the birth

Before the birth

The information in this guide was last updated on 26/02/2014

If you’re planning to start a family, getting your finances in order is a vital step in giving your child a stable future. Here’s a look at the necessities – budgets, maternity leave, childcare and child savings to help you get on a firm financial footing.

Sort out your budget

If you plan your budget clearly in advance you’ll know what to expect. Remember that you might have significantly less income if one of you stops working, and you have all the extra costs of a baby to think about. 

When you plan:

  • budget for the big purchases
  • account for the day-to-day extras like baby food and nappies
  • work out your monthly income – remember to factor in Child Benefit and maternity pay.

Now is also a good time to think about financial essentials:

  • Life insurance. If you don't have this, now is a good time to start thinking about it – you're about to have some more dependents.
  • Wills. It’s absolutely vital to have your will in order when you have a child. As well as dealing with money, you can choose who'd look after your kids if the worst happens. Remember to speak to your chosen guardians first. For more information on wills see our guide to Estate planning.

Child benefit

Child Benefit used to be available to every family, but this changed in 2013. If either you or your partner earns more than £50,000 you might not be eligible for some or all of the benefit.

In 2013/2014 child benefit is £20.30 per week for your eldest child and £13.40 for other children. Unlike in the past, it’s paid into your bank account every four weeks as part of the universal credit system – if you’re getting other benefits you get a lump sum all at once.
The only way to claim Child Benefit is to fill in a Child Benefit claim form, which you can find online.

Child benefit will come under the benefits cap. This means you can only claim up to £500 total per week from a wide range of benefits you may be entitled to. Find out more about the benefits cap.

Maternity pay

Statutory maternity pay (SMP) is the minimum amount of maternity pay an employer has to offer. Many employers offer more – check your contract to see what you’ll get.

SMP is paid for up to 39 weeks:

  • For the first six weeks you get 90% of your average weekly earnings (before tax). 
  • For the next 33 weeks you get £136.78 or 90% of your average weekly earnings (whichever is lower).

SMP is paid in the same way as your wages (eg monthly or weekly). Tax and National Insurance will be deducted. Find out more about Maternity pay.

Baby equipment checklist

Remember those big purchases you need to account for? Here’s a list of the basics to have ready in advance. Remember, you don’t need to buy everything at once – it’s still possible to buy things after the baby’s born!

  • Cot and bedding
  • Buggy
  • Changing mat or table
  • Car seat
  • Nappies
  • Clothes 
  • Feeding equipment eg: bottles and sterilizers

You can cut costs by shopping at second-hand sales, nearly-new sales from the charity NCT, eBay and car boot sales. Babies grow fast so clothes have often had very little wear, and you might find lots of new things people have had as unwanted gifts. There can be great deals on pricey items like buggies. However, car seats and cot mattresses shouldn’t be bought second hand – there are safety risks.

Registering the birth

Don’t forget you need to register your baby’s birth within six weeks to qualify for child benefit and get a birth certificate.

Parental leave

Childcare

Saving for children