Do you need to save for maternity leave? How to make it work financially

Although finding out you’re having a baby can be a joyous time, it can also bring huge anxiety – particularly from a financial point of view.

Because not only does adding a new life to the family incur extra expenses, it also means the mother is likely to be on maternity leave from work for an extended period, which means there’ll be much less money coming in.

Jackie Spencer from the Money and Pensions Service, a government- sponsored body which runs MoneyHelper to provide free and impartial financial guidance, explains that Statutory Maternity Pay (SMP) is available to women who earn at least £125 a week and have worked for their employer continuously for at least 26 weeks.

SMP is 90% of your average weekly earnings before tax for the first six weeks, followed by either £187.18 or 90% of your average weekly earnings – whichever is lower – for the remaining 33 weeks.

In addition, employers may offer enhanced maternity pay alongside SMP.

And self-employed women may get to up to 39 weeks Maternity Allowance instead of SMP, at a standard rate of £139.58 a week.

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Such benefits clearly mean less money is coming in to new parents’ households, and certainly, Maternity Action’s 2025 Cost of Living on Maternity Leave survey of 1,176 pregnant women and new mothers found just 3% of respondents didn’t worry at all about money during their pregnancy or maternity leave, 17% struggled ‘a lot’ to buy the things they needed, and 55% borrowed money or used credit cards to financially support themselves while on maternity leave, resulting in debt.

“In the UK the majority of employees are dependent on money provided by the government to support themselves during their maternity leave.” says Judith Dennis, head of policy at Maternity Action.

“Our research shows women are being pushed into poverty as a result.”

So, to cope financially during maternity leave, is it necessary to save up beforehand?

Dennis says:  “Women will often save up to help ease the situation, but it’s not enough – pregnant women and new mums are going into debt, going without food and other essentials. and many return to work before they wanted to as it’s just not possible to make ends meet.”

And Holly Mackay, founder and CEO of the Boring Money financial advice website, says: “I think any couple planning for a family need to start saving as early as possible because current levels of parental leave in the UK are pretty sparse.

“After the first six weeks, maternity pay falls to a maximum of £187 a week. This doesn’t go far. Even if you’re saving on things like travel, lunches and going out, the costs of a newborn soon add up – particularly for first-time parents who can get panicked into buying all the latest ‘must-haves’ from baby shops.”

Mackay says data from Pregnant Then Screwed suggests more than four in 10 mothers took just 12 weeks maternity leave after the birth of their most recent child, something which she believes is largely down to financial needs.

Here’s how the experts think parents can make maternity leave work financially…

1. Be prepared

Spencer says it’s important to start by understanding how much money you’ll have coming in when the mother goes on maternity leave, whether that’s from SMP or Maternity Allowance.

And she stresses: “If you’re employed by an organisation, remember that every workplace will have a different policy, so ensure you talk to your HR department to understand if they offer enhanced benefits.”

2.  Discuss finances well before the baby’s due

Don’t wait till the baby’s born to sort out your finances, warns Mackay.

“It’s important that couples have a money conversation before the baby arrives, and take the time to work through expectations about how you’ll both juggle parental leave and the financial and practical pressures a newborn can bring.”

And the conversation could include shared parental leave. “This is something couples may also want to consider,” suggests Spencer. “It allows eligible parents to share up to 50 weeks of parental leave and 37 weeks of pay between them.”

3. Don’t succumb to purchase pressure

There’s no set amount that parents should save before maternity leave starts, as it depends on what they earn in the first place. However, they’ll be able to save a lot more if they don’t spend their hard-earned cash on unnecessary baby items, and Mackay says: “First-time parents can feel the pressure to buy every latest gadget, outfit and pram, so having as much of a financial buffer as possible is important – as is a sensible and diplomatic friend who can gently remind you that babies don’t mind about having the latest outfit.”

4.  Job-hunting parents-to-be should consider more than just salary

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Although it may be too late if you’re already having a baby, Mackay points out that if parents are looking for jobs in the future, it’s worth considering the maternity and paternity benefits offered, rather than just the salary.

“Working parents who are planning to have a family should consider benefits packages as well as that headline salary when applying for jobs,” she says. “For example, a generous parental leave policy could make a much bigger impact on your family than an extra £2,000 in salary.”

5. Get advice

Plenty of advice on how to cope financially and what to save during maternity leave is available, both online and in-person, and Spencer stresses: “Making sure your finances can handle a new addition to your family can be tricky but there is support out there.”

She suggests inputting your rough budget into MoneyHelper’s Baby Costs Calculator. “It can help you work out how the costs of everything from your baby’s bedroom to travel items can stack up,” she says.

It may also help to use MoneyHelper’s free Baby Money Timeline, which indicates when you can start claiming free prescriptions, when you should be able to take paid time off, and when to start claiming allowances and grants.

“Managing a newborn is an expensive, tiring and time-consuming job, as well as a joy,” says Mackay. “Planning and saving as much as possible in advance is a really sensible idea and will take some pressure off those early weeks when you’re surviving on very little sleep and caffeine.”