Have a baby - but don't have kittens

A visit from the stork needn't be followed by a visit from the bailiffs. Dido Sandler on the financial pitfalls of pregnancy

Congratulations. You've managed it - you're pregnant. Or maybe you're just thinking about having babies.

The moment you receive confirmation, the medical path is laid out clearly. Regular check-ups, tests and plenty of sound advice await you right through until birth date, and beyond. But no one tells you how to cope financially, even though producing offspring may be the most expensive project you will ever undertake - and your finances may never recover from the shock.

A recent survey by the Joseph Rowntree Foundation found that the average child swallows up more than pounds 50,000 of your money by the age of 17. Educate your child privately, and you can add another pounds 100,000 to the figure. These massive costs are compounded by the fact that you, the mother, will probably be financially penalised for having the child. As well as any hit to your income for when you aren't working, health insurers restrict or withdraw cover, your pension planning may go awry, and in many cases even travel insurance policies will not cover you.

What you need is a financial healthcheck. By understanding what provision you are entitled to, and the shortfalls you face, you will be able better to budget through this very tight time.

Best off in the maternity stakes are those working for employers with enlightened employee benefits policies. For example, if you work for a company suchas Addison Wesley Longman, a publisher, and you have been there for 18 months by the 11th week before childbirth, you will receive 20 weeks' full pay, and you need only return to work 52 weeks after you went on leave. If you work for a less generous company, or you have not worked at a good company long enough, you can expect to receive just Statutory Maternity Pay (SMP) - the minimum your employer can get away with. This gives six weeks' salary at 90 per cent, followed by 12 weeks' at pounds 55.70. Self-employed and non-employed and those in a job for a very short period get maternity allowance, at pounds 55.70 or pounds 48.35 per week, for 18 weeks, depending on status.

Some employers require you to repay money over and above SMP if you do not return to work for a certain period after maternity leave. There is a case currently before the European Court questioning whether this sort of condition is enforceable. Company pension schemes tend to continue contributions during the paid maternity leave period. But if you leave the company before your return to work, pension payments for the leave period could be clawed back.

Employers have varying policies towards other benefits. According to Maternity & Parental Leave, a recent study by Incomes Data Services, a few employers make you give back the company car. Some allow you to accrue holiday entitlement while on maternity leave. Most continue life insurance, private medical insurance and long-term disability cover on your behalf (although the last two usually exclude maternity-related conditions).

Profit-sharing and profit-related pay tends to be limited to the paid period of maternity leave. Employers are increasingly allowing paternity leave, with an average of five days.

If you are self-employed, however, you are on your own - apart from the above-mentioned maternity allowance. The time out taken for having children can prove a big problem in pension terms. Fiona Price, managing director of London-based independent financial advisers (IFA) Fiona Price and Partners, which specialises in advice to women, warns that if you delay contributions to a personal pension for five years, you will have to pay double the amount for the same benefits at retirement. If you do have a personal pension, you could also get stung for high charges if you stop and then restart contributions later. Amanda Davidson, a partner at Holden Meehan, another London IFA, says Standard Life, Norwich Union and Scottish Mutual are good choices for women needing this type of flexibility, because they do not impose these extra charges.

You may find that you need to move to a larger house to accommodate the new arrival. Mortgages are easy to come by as long as you refrain from telling the lender that you are about to give up work. "Baby break" mortgages are available from various lenders, including Bradford & Bingley building society, where you can take a discount in payments at any time within a five-year term.

Most private medical insurers exclude pregnancy-related care. Dr Penny O'Nions, a specialist healthcare adviser, says just four companies - PPP, Norwich Union, Clinicare and Prime Health - do allow cover. The first three only pay for maternity in their expensive, top-of-the-range policies. Prime Health, on the other hand, is relatively cheap, and offers cover up to pounds 2,000.

Most permanent health or disability insurances exclude maternity. But they do generally pay out if you still continue to suffer a condition that stops you working three months after giving birth.

Finally, if the strain of pregnancy is getting on top of you, don't expect travel insurers to be too sympathetic. Most will not cover you if you have to cancel a holiday because of your pregnancy, nor will they give medical cover after 28 weeks of pregnancy.

Dido Sandler works for 'Financial Adviser'

YOUR MATERNAL RIGHTS

Minimum financial help mothers-to-be can expect:

If you have been in a job for at least 26 weeks by 15 weeks before the child is born, you are entitled to Standard Maternity Pay (SMP) at 90 per cent of salary for the first six weeks of maternity leave, pounds 55.70 per week for the next 12 weeks,

If you are ineligible for SMP - perhaps because of a recent job change - you will probably qualify for Maternity Allowance (MA), payable at pounds 48.35 or pounds 55.70, depending on employment status.

Child Benefit at pounds 11.05 per week for the first child, pounds 9 each for subsequent offspring. The eldest child is eligible for a higher rate of pounds 17.10, if you are a single parent.

If you are a member of a company pension scheme, the employer may continue contributions regardless of your income

National Insurance Contribution (NIC) credits may be available for low levels of income.

Continuing NIC credits may be available if you do not return to work after childbirth, available up to the child's 16th birthday.

From when pregnancy is confirmed to a year after birth you are entitled to free dental care and prescriptions.