When Molly and Taylor Haylett decided to start a family, they lacked a clear financial strategy for the transition. Their first child arrived unexpectedly, catching them unprepared for the economic shift that would follow.
Molly, 30, works as a financial adviser in Essex, while Taylor, 33, is a train driver. Before parenthood, their earnings were roughly equivalent. Once Molly reduced her working hours to care for their newborn, however, the household dynamics shifted significantly.
"Taylor's career propelled and mine took a step back," Molly explains. "There's an unintended impact on the person who spends more time at home with the kids."
To protect Molly's long-term financial security, the couple made an important decision: Taylor would contribute to Molly's pension during her time away from full-time work. This arrangement meant they were investing in both their futures rather than allowing one partner's retirement savings to stagnate.
"We were looking after both our futures, not just Taylor's," Molly says. She believes this is a conversation many couples should have before having children.
How do you raise the topic with your partner?
Molly recently discussed this approach with a friend who was planning to leave work after having a baby. The friend expressed uncertainty about how to broach the subject with her partner.
"My friend said, 'How would I even ask him to do that?' And I said, 'You've got to just ask him. People think only about the present and paying the bills but the person taking time off work could end up with much less in the future.'"
Taylor was unfamiliar with the concept of third-party pension contributions when Molly first raised it, but he responded positively to the proposal.
"We committed to a life together and if I could help out I would and I was pleased that I did," he says.
Taylor emphasises that while Molly takes the lead on household budgeting and financial planning—areas where she is more engaged—he remains involved in major financial decisions. "I don't just give her money and let her do what she wants. We have open conversations and she'll talk me through it," he explains.
What does research show about pension contributions during parental leave?
A study by Octopus Money revealed a significant gap in financial awareness among parents. More than a third of parents reduced or paused their pension contributions during parental leave, while 63% were unaware that a partner could make contributions on their behalf.
Third-party pension contributions are a formal mechanism that allows one person to pay into another's pension. For individuals with no income or very low earnings, up to £2,880 can be contributed each tax year, with basic-rate tax relief increasing that amount to £3,600. For those still earning, partners can also contribute, subject to the recipient's annual pension allowance limits.
According to HMRC guidance on pension contributions, a third-party contribution is treated as if the pension scheme member made it themselves, meaning the member receives the tax relief rather than the person paying in. This is an important distinction that affects how the contribution is processed and taxed.
Katie Guild, co-founder of financial community Nugget Savings, explains how the pension gap widens during maternity leave. When an employee's earnings drop, their own pension contributions naturally fall as a percentage of their reduced salary. During periods of unpaid leave, contributions may stop entirely. Guild recommends that couples consider whether the partner who continues working could help offset some of this shortfall.
For those on relief-at-source pension schemes, a third-party contribution can be made net of basic-rate tax, with the member able to claim higher-rate relief if they are eligible. Additionally, HMRC's pensions tax manual confirms that relievable pension contributions can be paid by either the individual member or a third party on their behalf.
What questions should couples discuss before having a baby?
Guild recommends that couples work through several key financial questions before a child arrives. These conversations are significantly easier to have before a baby is born than when parents are sleep-deprived and adjusting to life with a newborn.
Molly and Taylor now have two children, aged two and five. They were much better prepared for their second child and shifted their thinking about household expenses. Rather than always dividing costs exactly in half, they adopted a more flexible approach.
The couple each earn around £60,000 annually and maintain separate bank accounts alongside a joint account for shared bills. When circumstances change—such as during Molly's maternity leave—they adjust how much each contributes. Molly has found it helpful to "view finances as a household" rather than as two separate financial units.
How are they teaching their children about money?
Molly and Taylor are introducing financial concepts to their children from an early age. They opened pension accounts for both children when they were born and have been making regular monthly contributions through direct debit.
"It's like a gift for the future as they can't touch that money until they're in their 60s and we won't be there to see that," Molly explains.
The family also uses Junior ISAs, though Molly acknowledges that once the children reach adulthood, the money becomes theirs to manage. "If they want to, they can take that money and blow it in Ibiza," she notes.
Taylor involves their five-year-old in earning money through small household tasks rather than simply buying her everything she requests. The couple are also beginning to introduce the concept of delayed gratification, explaining that she can spend money now or save it to potentially have more later.
What support is available to families?
Guild advises couples to investigate the financial support available to them. This includes funded childcare hours, external childcare support schemes, and Tax-Free Childcare options.
She emphasises that conversations about money should not end once parental leave begins. When a baby arrives, couples should maintain ongoing discussions about their finances and continue to review their arrangements as circumstances evolve.
