MoneyHelper puts the basic cost of raising a child to 18 in the UK at £165,872. In the first few years most of the change comes from income, because one or both parents earn less for a while.
What happens to your pay
- Statutory Maternity Pay lasts up to 39 weeks. For the first six weeks it is 90% of your average weekly earnings. For the next 33 weeks it is £194.32 a week or 90% of your earnings, whichever is lower.
- Many employers pay more than the statutory amount. Your contract or staff handbook says how much, and whether you must return to work for a set time to keep it.
- Shared Parental Leave lets parents split up to 50 weeks of leave and up to 37 weeks of pay between them in the first year.
- If you are self-employed, Maternity Allowance can be paid for up to 39 weeks.
Your pension while you earn less
Each year with lower pension contributions is a year of growth the pot does not get back. Buzz Financial Planning works through an example in what a career break does to your pension: two years at home and five years on three days a week leave a pension about £44,750 smaller at 67, in today's money.
Your State Pension
Register for Child Benefit, even if your household earns too much to keep it. A parent registered for Child Benefit for a child under 12 gets National Insurance credits that count towards the State Pension. If either of you earns over £60,000, you can opt out of the payments to avoid the tax charge and still get the credits.
The full new State Pension is £241.30 a week, and you need 35 qualifying years on your National Insurance record to get it, or more if you were contracted out before 2016. A year with no earnings and no credits is a year missing from that record.
What to set up before the baby arrives
- Work out what the household will spend on the lower income. The survival budget calculator takes about five minutes.
- Build a buffer for the months when pay drops to the statutory rate. The emergency fund calculator gives you a target.
- Agree how money will work while one of you earns less. One way is a joint account for the bills, plus spending money for each of you.
- Find out what life cover and death-in-service you both have. A regulated adviser can tell you whether it is enough for a family.
- Make or update your wills and name a guardian. Our guide to wills and financial admin covers the paperwork.
When one of you earns less
The parent who stays at home or works part-time builds up less pension and less savings during those years. Some couples balance this. The partner who is earning can pay into the other's pension: anyone can pay up to £2,880 a year into a pension for someone with no earnings, and tax relief takes it to £3,600. Others move savings into joint names or into the lower earner's ISA.
Talk about it before the baby arrives, while you both have time to think.
Childcare costs and the help available
Childcare is often the next big cost after leave ends. Two schemes help, and you have to apply for both.
- Tax-Free Childcare tops up what you pay into a dedicated childcare account by 20%, up to £2,000 a year per child, or £4,000 if the child is disabled. Pay in £8 and the government adds £2, up to the annual limit. Both parents need to be working and each earning under £100,000 a year.
- Funded childcare hours work differently by nation. In England, eligible working parents can get 30 funded hours a week in term time from when a child is nine months old until they start school. In Scotland, funded early learning and childcare is 1,140 hours a year, generally from age three, with some eligible two-year-olds included. In Wales, the Childcare Offer provides up to 30 hours a week for eligible three- and four-year-olds. Northern Ireland runs smaller, separate schemes — check nidirect for what currently applies where you live.
- You cannot use Tax-Free Childcare at the same time as Universal Credit childcare costs or an old employer's childcare voucher scheme. Work out which pays more for your household before you commit, because switching back later is not always possible.
Apply for Tax-Free Childcare and any funded hours as soon as you know your return-to-work date. Processing can take a few weeks, and nurseries and childminders often need written confirmation before they will hold a place open.
Sources: GOV.UK (Statutory Maternity Pay, Shared Parental Leave, Maternity Allowance, Child Benefit, High Income Child Benefit Charge, National Insurance credits, new State Pension, pension tax relief, Tax-Free Childcare, 30 hours free childcare in England); mygov.scot (funded early learning and childcare); gov.wales (Childcare Offer for Wales); nidirect (Northern Ireland childcare support); MoneyHelper cost of raising a child, as quoted in Scottish Widows and NextWealth, Closing the advice participation gap, September 2026. Figures checked 15 October 2026.