Becoming a parent is one of life’s biggest milestones - exciting, emotional, and often a little overwhelming.
As your body, routines, and priorities start to shift, your wellbeing becomes more important than ever. From emotional and physical health to your support network and daily stress levels, there are so many parts of life that deserve care during this time.
One area that many new and expectant parents worry about is financial wellbeing. With changes to income, new expenses, and future planning to think about, it’s completely normal to have questions.
That’s why, in this blog, I’m chatting with a financial planner - Rachel Edwards, Director of Thrive Together FP Limited. Rachel helps families and professionals navigate life transitions with clarity and confidence, specialising in personalised planning for savings, protection, and long-term financial growth.
She's sharing practical information and reassuring guidance to help you feel more confident and prepared as you step into this new chapter.
Let’s dive in.
What financial steps should expectant or new parents take to prepare for maternity/parental leave and changes in household income?
Welcoming a baby is exciting, but it does mean your finances will shift a little. Before your little one arrives, it’s helpful to get a clear picture of what your income and outgoings will look like and how these might change.
- Know your entitlements: Eligible employees can take up to 52 weeks of maternity leave and receive Statutory Maternity Pay (SMP) for up to 39 weeks - the first 6 weeks at 90% of average weekly earnings, followed by £187.18 per week or 90% of earnings (whichever is lower) for the remaining 33 weeks. (MoneyHelper: Maternity Pay & Leave)
- Check what your employer offers: Some employers provide enhanced pay or continue pension contributions while you’re off, so it’s worth checking early.
- Build a small buffer: Saving 2-3 months of essential costs can make this time feel more comfortable.
- Plan ahead: Tools like MoneyHelper’s Baby Money Timeline can help you work out likely income, benefits, and costs.
- Prepare for flexibility: Life with a new baby can change quickly, so having a few “what if” plans in mind can be reassuring.
What are the best ways for parents to start saving for their child’s future, for example, through Junior ISAs or long-term investment options?
There are lots of simple ways to start building a nest egg for your child:
- Junior ISAs (JISAs): You can save up to £9,000 per child, per year, in 2025/26, choosing cash or stocks & shares. (GOV.UK: Junior ISAs)
- Little and often helps: Setting up a regular monthly amount can make saving feel effortless.
- Think long-term: Stocks & shares options may offer more growth over 10–18 years as you can adjust the risk level depending on the time frame.
- Give your savings a purpose: Naming the goal (university, first home, future adventures) helps keep things on track.
- Don’t forget yourself: It’s still important to keep your own retirement plans moving alongside saving for your children.
How can parents protect their family financially if something unexpected happens, such as illness or loss of income?
A few key protections can offer real peace of mind:
- Income protection: Helps replace part of your earnings if you can’t work due to illness or an accident.
- Life insurance: Supports your loved ones financially if you pass away.
- Critical illness cover: Provides help if a serious illness affects your ability to earn.
- Emergency fund: 3-6 months of accessible savings is useful for most families, even those who are financially secure.
- Estate planning: Wills and trusts help ensure your wishes are clear.
- Review regularly: Update protection as your family grows or circumstances change.
What’s the best way to balance short-term financial needs (like nursery fees) with long-term goals (like university savings)?
Both matter, and the trick is to give each a place:
- Use “buckets”: Essentials (childcare, bills), medium-term (education), long-term (retirement/legacy).
- Estimate realistic costs: MoneyHelper’s Baby Costs Calculator can help.
- Automate savings where possible: Cover essentials first, then set up regular savings for longer-term goals.
- Review annually: As income or childcare needs change, your plan can too.
- Be flexible: Pressing pause on long-term saving for a short time is completely normal.
Are there any government schemes or tax benefits that parents might not be aware of?
Many families benefit from support they didn’t realise they were entitled to:
- Child Benefit: £26.05/week for the first child and £17.25/week for additional children (subject to HICBC if an individual earns over £60,000). (GOV.UK: Child Benefit)
- Tax-Free Childcare: The government adds 25% to what you pay in, up to £2,000 per child per year (£4,000 if disabled), if each parent earns under £100,000. (GOV.UK: Tax-Free Childcare)
- Free childcare hours: Up to 30 hours per week for eligible children aged 9 months to school age. (GOV.UK: Free Childcare)
- Maternity/Parental Allowances: For those who don’t qualify for SMP. (MoneyHelper: Maternity Allowance)
- Pension contributions during leave: Check whether your employer continues these while you’re on leave.
What other helpful information can you share?
- Take it step by step: Small, structured plans can reduce stress.
- Lifestyle tweaks: Things like batch cooking, reusing baby items, and reviewing subscriptions can free up cash.
- Keep communicating: Talk openly with your partner about money, childcare arrangements, and savings goals.
- Review regularly: Life changes fast with little ones, so revisiting your budgets, savings and protection every 6–12 months can help keep things on track.
*Figures accurate as of November 2025
* This content is for educational purposes only and does not constitute personal financial advice.