OP - here goes, I know a few second wives, one at least was the OW, and while not ideal, life is complicated and people don't always think about the best way to do things when emotions are involved.
However, every second wife who's relationship has worked long term has had to make certain decisions, one being that a) the step children need to come first and b) they don't get to have anywhere near as good a lifestyle as if they'd been the first wife. So while his first wife could afford to be a SAHM, if a third of his salary is only £500, then he can't afford to support a second family, you will have to give up that idea. If he could afford to provide a certain size of house and a certain standard of living for his first wife (indeed, you in your marriage could expect certain levels), if you are to be the second wife, you have to accept a significantly lower standard of living. Getting into debt in order to try to have the lifestyle you think you should have isn't a long term plan, you have to find a man without baggage, or accept this man will never give you that lifestyle. The only 2nd wife I know who isn't having to pay the bulk of the bills and their lifestyle is one who married a bloke on over £1m a year, every other 2nd DW has had to accept if they want a nice house and good standard of living, they will have to pay for it themselves.
Certainly if he's only taking home such a small sum each month and has a family to support already, you really need to accept funding for any DCs you have will have to be down to you, and practically you can't afford to take a year off after having a DC if you are doing it with a DP who's got other family commitments, you've got debts and neither of you are earning high wages. With your DP's wage levels it would be a struggle even if he was single with no other commitments.
You might have to give up some things you want from life, but that's the cost of being with this man. You've picked a man who already has commitments that are bigger than his relationship with you, only you know if it's worth it, but you can't sidestep those or the knock on effects to your relationship (ie. you can't expect him to fund anything other than the basics, you probably can't have DCS for a couple of years without it being a massive struggle, his free time will never be entirely reseved for you and your DCs, you will forever be 'the other woman' amongst his family and friends - many of whom will take against you on principle etc)