Financial Checklist for New Parents — UK Money Guide

Becoming a parent brings new financial responsibilities. This checklist helps you navigate all the money matters.

Before Baby Arrives

Financial Preparation

Task	Priority
Review household budget	High
Build emergency fund	High
Check insurance coverage	Medium
Start baby savings pot	Medium
Research childcare costs	High

Work and Leave

Task	When
Confirm maternity/paternity leave	15 weeks before due date
Check enhanced pay	With employer
Plan handover at work	Before leave starts
Calculate income during leave	Budget planning

Maternity and Paternity Pay

Statutory Maternity Pay (SMP) 2025/26

Period	Amount
Weeks 1-6	90% of average weekly earnings
Weeks 7-39	£187.18/week (or 90% if lower)
Total leave available	Up to 52 weeks
Paid leave	Up to 39 weeks

SMP Eligibility

Requirement	Details
Employed for 26 weeks	By 15th week before due date
Earning at least	£125/week average
Still employed	At 15th week before due date
Given correct notice	To employer

Statutory Paternity Pay (SPP) 2025/26

Feature	Details
Amount	£187.18/week (or 90% if lower)
Duration	1 or 2 weeks
Must take within	56 days of birth
Eligibility	26 weeks service, earning threshold

Shared Parental Leave (SPL)

Feature	Details
What it is	Share leave between parents
Maximum	50 weeks leave, 37 weeks pay
Flexibility	Split into blocks
Notice needed	8 weeks

Maternity Allowance

Situation	When It Applies
Not eligible for SMP	Self-employed or not enough service
Amount	£187.18/week (or 90% of earnings)
Duration	Up to 39 weeks
Claim from	DWP, not employer

Child Benefit

How Much You’ll Get

Child	Weekly Rate (2025/26)
First child	£26.05
Additional children	£17.25 each

Annual Amounts

Children	Yearly Total
1 child	£1,354.60
2 children	£2,251.60
3 children	£3,148.60

High Income Child Benefit Charge

Adjusted Net Income	Tax Charge
Under £60,000	None
£60,000 - £80,000	1% for every £200 over £60,000
Over £80,000	100% (equals benefit amount)

Claiming Child Benefit

Tip	Details
Claim anyway	Even if high earner
Why	Protects your State Pension
National Insurance credits	Given to claimant
Opt out of payment	Still get NI credits

How to Claim

1. Online at gov.uk/child-benefit
2. By post (CH2 form)
3. Need child’s birth certificate
4. Claim within 3 months of birth

Tax-Free Childcare

How It Works

Feature	Details
Government top-up	20% of what you pay in
Maximum per child	£2,000/year (£4,000 disabled)
You pay	£8,000, government adds £2,000
Use for	Registered childcare

Eligibility

Requirement	Details
Both parents working	Or one working, one certain benefits
Earning at least	£2,167/ quarter (16 hours × NMW)
Not earning more than	£100,000 per parent
Not receiving	Tax credits or UC childcare

Free Childcare Hours

2025/26 Entitlement

Age	Hours	When
2-year-olds	15 hours/week	Term-time
3-4 year-olds (working parents)	30 hours/week	Term-time
3-4 year-olds (universal)	15 hours/week	All families

Working Parents Eligibility

For 30 hours:

• Both parents working (or single parent)
• Earning at least £2,167/quarter each
• Neither earns over £100,000/year

Childcare Costs

Average UK Costs (2025)

Type	Average Cost
Full-time nursery (under 2)	£14,000-£16,000/year
Full-time nursery (2+)	£13,000-£15,000/year
Childminder (25 hrs)	£7,000-£9,000/year
After-school club	£50-£70/week

Regional Variation

Region	Typical Factor
London	+30-50%
Southeast	+20-30%
Other regions	Varies

Planning Childcare Budget

Step	Action
Research local costs	Visit nurseries
Factor in free hours	Reduces cost
Include Tax-Free Childcare	20% saving
Calculate net cost	After all help

Saving for Your Child

Junior ISA (JISA)

Feature	Details
Annual limit	£9,000 (2025/26)
Tax-free	No tax on growth
Access	Child at age 18
Types	Cash or Stocks and Shares
Who can contribute	Anyone

Cash vs Stocks and Shares JISA

Type	Best For
Cash JISA	Safety, short timeframe
Stocks and Shares	Long-term growth (18 years)

Child Trust Funds

Status	Details
Closed to new accounts	Since 2011
Existing funds	Continue until child is 18
Can transfer to	Junior ISA

Premium Bonds for Children

Feature	Details
Minimum	£25
Maximum	£50,000
Prizes	Tax-free
Access	Parent until child is 16

The £100 Rule

Rule	Details
Interest from parent’s gift	Over £100/year taxable
Applies to	Cash savings, not stocks
Workaround	Grandparents gift instead
JISAs/CTFs	Exempt regardless

Wills and Protection

Update Your Will

Task	Priority
Appoint guardians	Essential
Review beneficiaries	Name child
Set up trusts	For inheritance
Store safely	Solicitor or will registry

Life Insurance

Type	Purpose
Term life insurance	Cover mortgage, income
Increasing cover	Grows with inflation
Critical illness	Covers serious diagnoses
Income protection	Replaces lost earnings

Recommended Cover

Cover Type	Amount to Consider
Life insurance	10x annual income
Critical illness	3-5x annual income
Income protection	50-70% of income

Budget Adjustments

Typical New Parent Expenses

Category	Monthly Cost
Nappies and wipes	£40-£60
Formula (if used)	£50-£100
Baby food	£30-£50
Clothing	£20-£50
Childcare	£500-£1,500+
Activities	£0-£50

One-Time Costs

Item	Typical Cost
Pram/travel system	£200-£1,000
Cot and mattress	£100-£500
Car seat	£100-£300
Nursery furniture	£200-£800
First wardrobe	£100-£300

Money-Saving Tips

Tip	Saving
Buy second-hand	50-70%
Accept hand-me-downs	Free
Batch cook baby food	vs jars
Cashback and vouchers	Various
Library activities	Free
NCT/community groups	Low cost

Summary Checklist

Before Birth

• Calculate budget with reduced income
• Notify employer of leave
• Check enhanced maternity/paternity pay
• Start baby savings fund
• Research childcare options

First 3 Months

• Register birth
• Claim Child Benefit
• Check NHS exemption certificate
• Update will and guardians
• Review life insurance

3-12 Months

• Apply for Tax-Free Childcare
• Research free hours eligibility
• Open Junior ISA
• Plan return to work
• Book childcare place

Ongoing

• Annual JISA contributions
• Review childcare costs
• Update budget regularly
• Review protection insurance
• Plan for school costs