Becoming a parent

Many say that becoming a parent’s one of the most profound and meaningful experiences a person can have. While incredibly joyful, the transition to parenthood also brings major life adjustments - especially to your finances. For those expecting a new arrival, it helps to plan and prepare for the exciting journey ahead.

There are many ways to become a parent; whether you or your partner are pregnant, you’re looking into surrogacy or adoption. Here’s an overview of what to expect when becoming a parent in the UK.


If you’re pregnant and a patient of the NHS, you can get free prenatal and maternity care. This includes antenatal check-ups, prescriptions, and the delivery itself. NHS dental treatment‘s also free while you’re pregnant. However, you could still incur some expenses. For example, if you access any private healthcare services.

If you’re becoming an adoptive parent, there’s also financial support available. You can apply for the Adoption Support Fund to fund therapeutic services, although there’s an eligibility criteria.

Parental leave and pay

From your employer

Whether you’re welcoming a baby into your family or adopting an older child, you’re entitled to parental leave. If you’re employed, make sure you know what support is available to you - from time off for antenatal appointments to parental leave. It’s common for agencies and trusts to recommend you take 9-12 months off work, regardless of the age of the child.

To find out about your policy, check your employment contract or ask your HR department.

Find out about PensionBee’s Parental Leave Policy.

Government support

If you’re not currently employed, there’s government support available, including:

There’s also support for families on lower incomes:

Government support’s also available for parents who are adopting:

The rules around surrogacy are slightly different. Maternity Action has a fantastic guide for parents in surrogacy arrangements.

If you’re self-employed, you’re able to claim some government support. You might be able to get Statutory Maternity Pay if you’re self-employed via your own limited company; your company could pay your Statutory Maternity Pay, then reclaim it from HMRC. You can’t get Statutory Maternity Pay if you’re a sole trader, but you can claim Maternity Allowance if you’ve been registered as self-employed for at least 26 weeks.

You can find out more about parental rights if you’re self-employed on the Maternity Action website.

Child Benefit and Tax Credits

The UK government provides financial support for families including:

You can check your eligibility for Child Benefit or Child Tax Credit and start a claim on the website.

Household costs

If you’re having your first child, you may be wondering how much you need financially for your arrival. You’ll need to prepare for an increase in household costs as well as the drop in income. With newborn babies comes the cost of equipment such as monitors and car seats, and with older children there’ll be hobbies and activities to fund. With children of any age, you’ll be spending more on clothing, groceries and toys. If you’re not sure where to start, use the MoneyHelper baby costs calculator to help you work out your baby budget.

Childcare costs

Childcare expenses in the UK can be substantial. If you don’t have family support, you might need to consider nursery care or childminders. Government support for eligible working parents can help offset these costs:

  • Tax-free childcare for eligible parents can be up to £2,000 per year. You can claim this for each of your children but there’s an eligibility criteria.

  • 30 hours of free childcare per week is also available for eligible parents with children aged 3-4 years old. However, this is only available during the 38 weeks of term time per year.

Research your local options and factor childcare expenses into your family budget.

Education costs

Primary and secondary education is free in the UK. But you might choose to save for your child’s or children’s higher education. There are tax-efficient ways to save for your children; you could open a Junior Individual Savings Account (JISA) and save from their birth until they’re 18. You could also open a junior pension for your children’s future retirement.

Don’t forget about your pension

If you’re taking time out for parental leave, you can still contribute to your workplace pension. This is the case if your workplace scheme is a defined contribution pension. Personal contributions are based on your statutory parental leave pay, not your full salary. Employers can also continue to make contributions. These will usually still be based on your full salary.

If you stop making contributions, the employer contributions will also stop. So if you can afford to continue paying into your pension while you’re taking time off, it’s worthwhile.

Life insurance and wills

If your family’s expanding, you may wish to review your life insurance policy. This will ensure your family’s protected in case of an unexpected event. And if you haven’t already, make sure you create and maintain a will.

The transition to parenthood will be a rollercoaster, but support’s available. Preparing your finances as much as you can in advance goes a long way for new parents.

Listen to episode 19 of The Pension Confident Podcast where our guests discuss preparing to have kids, childcare costs and more. You can also watch the episode on YouTube or read the full transcript.

If you’re interested in learning more about looking after family members, what to do when expecting a baby, or family problems like illness, divorce or bereavement, head to our Family and Care section.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 06-04-2024

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