To ask how to politely opt out of this?

The OP says it used to be £20 and they are now suggesting £40.

Both OP and her DH would do the secret Santa, that’s why it’s £40.

Will anyone be buying for the baby as part of this as well?

But it's just one gift - not £80? Surely it's his family so he's the one buying the gift? Or are you both in the draw?
I'd write back saying too much - you have other obligations but a hike to £20 would be a compromise. At least with £20 you could get something nice, not sure what I'd get an adult with £10 that's worth keeping. Maybe wine.

I'd just spend what you want, £40 is the upper limit, so just spend less, no one will know.

I don't think £40 is unreasonable or excessive if you get away with spending £80 in total on your husband's side of the family. You will end up spending much more than that on your side if you are buying for children in addition to the £10 secret Santa - I would also say those £10 gifts will probably be money wasted, because these days unfortunately there is very little you can get for that.

But if you genuinely don't have £80 to spend it is absolutely fine for your husband to just tell his parents to leave your names out. If it is a big secret Santa including cousins etc, it is likely nobody else will notice with any luck.

Could you suggest it just goes up to £30 rather than £40? Alternatively just buy a £30 gift - they'd have to be pretty rude to check the price and quibble!

If you really can't afford the £40, then DH needs to tell his parents that, either that you'll opt out completely, or you'll stick to a tenner. But if you opt out, will you still need to get something to open for lots of people instead? Will it in fact add up to more?

At the end of the day it's £40 extra over last year. Without assuming anything, I have to ask is it worth all the drama for that really?

I understand where you are coming from, but maybe if you suggested a compromise of £30 that might work. But again, not worth the hassle IMV. I am very sorry if I insulted you by suggesting this. £40 may be make or break for you.

Thank you. It's still a big hike. Anything like that should be discussed between the participants, not imposed by edict. I'd be tempted to open up a wider discussion on keeping it to £20 or just raising to £25 - but I am not a fan of the "let's not do gifts" but then surprising people with something anyway.

You can simply say no, we would prefer not to take part this year thanks. That is your right. I don't think there is a magic way to control others' reaction to it though, especially if they will all be buying for your baby.

Get your DH to speak to his parents, advise them you have already budgets to do the same as last year and you can’t afford more, so either they reduce it back or accept you won’t be taking part. Then set some expectations for next year along the lines of £20 max and presents for children up to age 18

Some good suggestions…Do it fast though before they include you in the draw!

No that is her side of the family where she’s happy to spend a tenner x2 plus extra on children.

OP clearly you don’t like your in-laws. What does your husband say about being part of secret Santa for your family but not his?

I thought she just said that her own family do £10.

I read it that her side do £10, jokey thing, and they do children separately, ILs' side was unspecified until the hike to £40.

Fair enough though, I can see it can be read as £10 jumping to £40 too.

Reply "Sorry but no, we are cutting right down this year so shall we scrap Secret Santa or leave it at £10?"

Op says it was £10...

I don’t think there is a right or wrong amount to spend on Secret Santa as it’s all comparable to income.

Just reply and say that you can’t take part in it this year due to finances but are looking forward to still seeing everyone at Christmas.

What was it before it was £40?

You can of course opt out but it's a bit odd to think of it as spending £40 on a random cousin. £40 is your contribution to the entirety of gift giving on the IL side.

How are children going to work on your IL side? It might look grabby to step back from spending at all on adults but then keep receiving gifts from them to the baby for the next decade or more.

Hi sorry but we have budgeted for Christmas already @£10 a head..
Don't be bullied by others into how you spend your own money...

Tell her that you are really stretched and that you will opt out of secret Santa but look forward to see them to spend time with family.

I agree the MIL hasn’t done anything wrong by asking, but surely the main point of Secret Santa is to opt in rather than have it thrust upon you. I’d love a £40 thing as a treat but there is no way on earth I can reciprocate at this time. So I’d opt out.

Just tell them you’ve already done your shopping for this year and you haven’t budgeted for that so you’ll have to opt out.

Do you get to put a wishlist? If money is tight it's frustrating to spend £40 and get something you don't want in return. Higher risk than when a few people buy you small gifts. But if there's something you'd be buying yourself anyway - like a bottle of gin and a couple of bottles of wine - you could ask for those so you're still taking part but not so out of pocket.

There's no right or wrong answer here, but the point of secret Santa is to cut on budgets and shopping. £40 on one person is still going to be a lot less than a tenner on each family member, and probably easier to think of something nice for £40 than £10! A tenner really doesn't buy much these days and rules out most nice chocolates, perfume, fancy toiletries, wine, whiskey etc - all the easy presents.

Like I say, nothing wrong at all with saying it doesn't work for you this year, but I don't think MIL is in the wrong at all. Just get DH to say no thanks this year (and obviously that you don't expect anyone to buy for you.)