Statutory Maternity Pay runs for up to 39 weeks: 90% of your average weekly earnings for the first 6 weeks, then £194.32 a week or 90% of earnings, whichever is lower, for the next 33. Maternity leave itself is 52 weeks, so the last 13 are unpaid. Statutory Paternity Pay is 2 weeks at the same £194.32 rate or 90% of earnings if lower. Shared Parental Pay is also £194.32. The planning problem is not the total — it is that income falls off a cliff twice, at week 7 and again at week 40.
The shape of the year
Most guidance presents parental pay as a total figure, which is the least useful way to look at it. What actually determines whether the year works financially is when the money changes, because your outgoings do not change at the same moments.
| Period | Maternity pay | What happens to your budget |
|---|---|---|
| Weeks 1–6 | 90% of average weekly earnings, uncapped | Close to normal. This is the easy stretch, and the one people plan around by mistake. |
| Weeks 7–39 | £194.32 a week, or 90% of earnings if lower | The first cliff. For most people this is a very large drop, arriving eight weeks in. |
| Weeks 40–52 | Nothing | The second cliff. Statutory pay has stopped; leave has not. |
£194.32 a week is about £842 a month. For someone taking home £2,400, week 7 is a drop of roughly £1,550 a month, and it lands at the point when you are least equipped to do anything about it. Knowing the date in advance is most of the battle.
Work out the calendar date your pay drops to the flat rate, and the date it stops altogether, and put both in a diary now. Almost every financial difficulty people describe during parental leave traces back to those two dates arriving as a surprise, months after anyone last thought about them.
What each parent is entitled to
Maternity leave and pay
Maternity leave is 52 weeks: 26 weeks’ ordinary leave and 26 weeks’ additional. It is a day-one right, regardless of how long you have worked somewhere. Statutory Maternity Pay is different — it requires having worked for your employer continuously for at least 26 weeks by the qualifying week and earning above the lower earnings limit — and it runs for up to 39 of those 52 weeks. Tax and National Insurance come off SMP in the normal way.
If you do not qualify for SMP, check Maternity Allowance, which is paid by the Department for Work and Pensions and covers people who are self-employed, recently changed jobs, or do not meet the SMP conditions.
Paternity leave and pay
Statutory paternity leave is one or two weeks, taken as a block, with Statutory Paternity Pay at £194.32 a week or 90% of average weekly earnings if that is lower. Two weeks is short by international standards and worth naming as a planning constraint rather than an option.
Shared Parental Leave
If eligible, the birth parent can end maternity leave early and convert the balance into Shared Parental Leave, which both parents can take — in blocks, at the same time or separately, up to 50 weeks of leave and 37 weeks of pay between you. Statutory Shared Parental Pay is £194.32 a week or 90% of earnings if lower.
The financial calculation is usually straightforward: whoever earns less should generally take more of the flat-rate period, because the household loses less. The non-financial considerations are real too, but the arithmetic is worth doing explicitly rather than assuming the default.
The question that changes everything
Before any of this arithmetic matters, find out what your employer actually offers. Enhanced parental pay is common and varies enormously — some employers pay full salary for three or six months, some top up to a percentage, many pay statutory only.
Ask specifically: how many weeks at what percentage, whether there is a return-to-work condition requiring you to repay if you leave within a period, and how pension contributions are handled. Get it in writing. The difference between statutory-only and six months at full pay is tens of thousands of pounds, and it determines whether the plan you are making is about managing a squeeze or managing a crisis.
Pensions during leave
While you are receiving maternity pay, your employer must continue their pension contributions based on your normal salary, not on your reduced pay, while your own contributions are based on what you actually receive. That is a quietly valuable feature of paid leave. During unpaid leave, contributions typically stop — worth knowing, and worth asking about.
Planning for the cliffs
There are only four levers, and the earlier you pull them the better they work.
Save into the gap, before it opens
The months before the birth are the cheapest time to build a buffer, because you are still on full pay. Work out the monthly shortfall from week 7 onward, multiply by the number of months you intend to take, and treat that as a savings target with a deadline.
Cut committed costs now, not later
Every pound removed from a recurring cost is a pound of shortfall that never has to be funded. Subscriptions, insurance renewals and energy tariffs are the usual candidates, and doing it in advance compounds across the whole year.
Decide how long you are actually taking
The 52 weeks are a maximum, not a target. Deciding early — even provisionally — between nine months and twelve months makes the savings target concrete rather than open-ended.
Check what else you are entitled to
Child Benefit is worth claiming even if the High Income Child Benefit Charge applies to your household, because it protects National Insurance credits toward your state pension. Also check Tax-Free Childcare and the funded hours schemes for later, and Universal Credit if household income drops enough to qualify.
That total is daunting seen all at once and manageable seen as a savings target with nine months’ notice. Both households and individuals consistently underestimate it, largely because the first six weeks feel fine.
If you are doing this as a couple
Parental leave is where household finances stop being two separate systems, often for the first time. A few things are worth agreeing explicitly rather than letting them happen.
- How costs get split while one income is reduced. Fifty-fifty stops being fair when one person is on £842 a month. Splitting in proportion to income is the usual answer, and it is much easier agreed in advance than renegotiated at week seven.
- Whether the person on leave keeps their own spending money. The parent on leave is doing full-time work for a fraction of an income, and having no discretionary money of their own is corrosive in a way that shows up months later.
- What happens to joint savings. Whether the shortfall comes from joint savings, from one person’s savings, or from reduced saving elsewhere — decided now, not in the moment.
If you have not already had the wider version of this conversation, our guide to moving in together covers the mechanics of splitting costs fairly when incomes differ.
Going back
Returning to work is not a return to the old budget, because childcare arrives at the same moment. It is common for a second income to be largely absorbed by nursery fees in the early years, which is a legitimate reason to look at the household position rather than at whether one person’s salary “covers” childcare — framing it that way tends to push one parent out of the workforce for reasons that do not survive a ten-year view.
Check Tax-Free Childcare, which gives £2 for every £8 you pay in up to a limit, and the funded hours available in your nation. Then rebuild the monthly plan from the new numbers: two incomes, a large new committed cost, and a set of habits formed during a very different year.
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