Saving for a new baby: costs, benefits and how to build a fund

The cost of raising a child from birth varies widely depending on choices, but most UK parents spend between £6,000 and £12,000 in the first year alone. Major first-year expenses include: pram and travel system (£300 to £1,200), cot and mattress (£100 to £400), nursery furniture (£200 to £600), car seat (£80 to £300), clothes (£200 to £500 across rapid growth spurts), feeding equipment and formula if not breastfeeding (£400 to £800 for the year), nappies and wipes (£600 to £1,000), and childcare if returning to work — which in the UK averages £1,000 per month for full-time nursery. Many of these costs can be reduced by buying second-hand through Facebook Marketplace, Vinted, and local parent groups. Car seats should always be bought new for safety reasons, but almost everything else can be sourced second-hand in excellent condition.

Before panicking about costs, make sure you are claiming everything you are entitled to. Statutory Maternity Pay (SMP) pays 90 percent of average weekly earnings for the first six weeks, then £194.32 per week (2026/27 rate, or 90 percent of earnings if lower) for up to 33 weeks. Statutory Paternity Pay is two weeks at the same rate. If you do not qualify for SMP through your employer, you may be able to claim Maternity Allowance instead. Child Benefit pays £27.05 per week for the eldest child and £17.90 for additional children (2026/27 rates) — claim this as soon as your baby is born regardless of income (higher earners may need to repay some via the High Income Child Benefit Charge but it is still worth claiming). Universal Credit and Tax-Free Childcare can also significantly reduce childcare costs when you return to work. Check the GOV.UK benefits calculator or speak to Citizens Advice to make sure you are not leaving money on the table.

Ideally, start saving during pregnancy or even when you begin trying for a baby. The nine months of pregnancy is a useful saving window. Aim to have at least three to six months of reduced income covered in savings before your maternity or paternity leave begins, as statutory pay is often significantly less than your normal salary. Open a dedicated baby fund savings account and set up an automatic monthly transfer. Review your household budget together as a couple: identify subscriptions or expenses you can cut or pause for a year. As your due date approaches, resist the temptation to buy everything new from premium baby brands — most babies do not care about designer prams. Research what you genuinely need versus nice-to-haves, and create a registry so family and friends can contribute useful items rather than duplicating gifts.