Savings and pensions
It can be tricky saving money for your child and your retirement at the same time. When you reach your 40s, retirement planning should be a serious financial consideration – but if you have a baby, you may want to think about their long-term future too.
Hopefully, you’ll have started putting money away in a pension already. If not, you’ll want to get going, or perhaps boost your contributions into a current plan.
You may need to accept that if you’re an older parent you could be working for longer. After all, you may be already retired or approaching retirement by the time your child turns to the so-called ‘bank of mum and dad’ to help buy a first home.
Yet there are plenty of options to save for your child, such as a tax-efficient Junior ISA. Finding a balance of financially taking care of your children while also planning for your long-term future is key.
Your parents may be too old to help out with childcare, or have retired and moved abroad, for example. You may face paying out substantial sums in childcare, without any free help from family.
There is some help available – check the government website for more information. For example, in England, you may be able to get up to 30 hours free childcare if your child is three to four years old. Other government benefits may also help fund the cost, if you’re eligible.
You may also choose to search for other local families looking for childcare, either in person or online. This way, you could get a nanny to take care of two children at once, slashing the cost.
The cost of life insurance gets more expensive as you get older, but it’s an important consideration if you have children. Unfortunately, the older you get, the higher the chance you may suffer a serious illness. This makes it important to think about how you’d financially protect your family should you become ill, or die. Ideally, you’ll have enough life insurance to pay off outstanding and future debts. This could include your mortgage, childcare and your children’s education.
If you’re self-employed you might want to consider income protection cover too, which pays out a tax-free income after a few months if you’re unable to work due to illness, an accident or disability.
Updating your will
Many of us will have put a will in place by the time we reach our late 30s and 40s. If so, you’ll need to think about updating this after you’ve given birth. This should include who will be the guardian for your child if you’re not around. They may be a family member or close friend – it’s up to you, and an important consideration.
Finally, if you’re unsure about your personal financial situation, consider seeking professional advice to guide you on what action to take.