Starting a family - 9 steps to baby-proof your finances

Having a baby can be everything from exhilarating and rewarding to challenging and exhausting, not to mention costly. A little planning before parenthood can help to steer your family fortunes in the right direction.

Deciding to start a family can be one of the most expensive choices we make in life. The average cost of raising a child in the UK from birth to the age of 21 is £231,843* – more than an average home. So what steps can soon-to-be-parents take to help keep their finances on track?

1. Know your family budget.

Before you do anything else, sit down and work out your monthly incomings and outgoings for new arrivals. This will give you a good idea of where your money will go each month and how much will be left over. Our online budget tool can help you to do this.

2. Understand maternity and paternity pay.

As an employed mother-to-be, you may be eligible for statutory maternity pay (SMP) for up to 39 weeks. According to Gov.UK, as at April 2016 you get:

  • 90% of your average weekly earnings (before tax) for the first 6 weeks
  • £139.58 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks

Fathers and partners may also be eligible for 1 or 2 weeks paid paternity leave. The statutory weekly rate of paternity pay is also £139.58 or 90% of your average weekly earnings (whichever is lower).  Expectant mothers and fathers/partners may also be eligible for Shared Parental Leave and Pay.

3. Look for cost savings.

The arrival of a new baby not only means another mouth to feed, but also that household income may decrease if you are only receiving statutory maternity/paternity pay. Shop around to see if you can get a better deal on any outgoings. Even small savings on fuel, energy and phone bills can quickly add up.

4. Save what you can.

If you don’t already have a savings account, it can be a good idea to open one when you’re preparing to start a family. Savings are a good way to build up money for unexpected costs, or to cover the expense of kitting out your home ahead of the baby’s arrival.

5. Calculate your childcare costs.

The average cost of sending a child under two to nursery is:

- £115 per week** - part time
- £212 per week** - full time

A registered childminder can cost around £104** per week and a part-time nanny could set you back as much as £200-£275** a week. Little surprise then that many new parents are turning to family and friends to step in – it is estimated that grandparents save UK families £11bn** each year in childcare costs.  

6. Claim your entitlements.

A variety of government benefits and grants are available for eligible expectant mothers and parents in the UK – as outlined on the Money Advice Service website. These range from free NHS dental care while you’re pregnant and for a year after the baby is born, to child benefit and child tax credits.  

7. Consider ways to boost your income.

Whilst you are on parental leave, you might want to consider simple ways to raise some extra cash – perhaps by selling unwanted possessions, or participating in paid online surveys.

8. Reuse and recycle baby items.

While you want things to be perfect for your new arrival, not everything needs to be brand new. Hand-me downs from friends and family can be a good way to save money - and keep an eye out for ‘nearly new’ sales in your local area. Read our ‘Baby on the way: getting ready for your new arrival’ article to find out more about prioritising your purchases. 

9. Open a savings account for your child.

Whether friends and family gift you money for the baby, or you simply want to start putting some away for your child’s future, it is never too early to look at opening a savings account. Lloyds Bank offers both Junior Cash ISAs and Child Saver accounts.

Your next steps

Review and assess

Planning ahead will help you to make better decisions and to prepare for your new arrival. To help you get a clear picture of your financial situation, we offer a free personal financial review in our branches that you might find useful.

Help and support

Visit for more information on parental leave and pay.

The Money Advice Service provides advice on help with childcare costs.

Worried about managing your debt? Lloyds Bank offers some realistic advice.


* According to the Centre of Economic and Business Research (CEBR) as at February 2016

** According to the Family and Childcare Trust

Important legal information

Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS).

Lloyds Bank | Starting a family | Baby proof your finances

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