After a visit from Monty's pregnant girlfriend, Rita dumps him and goes out with the charming, urbane Leo Brandon, who has employed Maggie in his hat shop, only to be told that he is gay!

Maggie is also dated by the well-spoken, well-educated Tom. Harvey starts work with Dick and his father in their law firm, falling foul of officious chief clerk Ryder but persuading the firm to act for the Gottliebs in their efforts to free a young Jewish friend arrested by the British for trying to enter Palestine.

Having thrown Tom over for Lou, Maggie is devastated when a letter arrives from Scotland to say that Lou is now dating his convalescent nurse.

The last member of the family for whom she once worked has died, leaving her an old car. With Frieda to supervise Nan drives Maggie, Stanley and Harvey back to the house where she worked, where Harvey and Frieda kiss and Harvey learns a secret from Nan's past. However the car breaks down so Nan sells it. Rita agrees to stay friends with Leo and buys into a hair-dressing salon whilst Stanley wins a school essay competition with a story based on Nan's little secret.

Christmas is coming, and Harvey clears the air with Ryder whilst Rita takes over the running of the salon and Maggie gets back with Tom, to the dismay of her annoying friend Veronica.

The Gottliebs' teen-aged compatriot Yossela moves into the house but he is deeply disturbed by his wartime experiences and behaves erratically, slashing a portrait Frieda is painting of Harvey as he is jealous of their growing relationship. Ultimately, with Tom's help, he is put onto a ship bound for Palestine and, with peace restored, Nan kisses Erich under the mistletoe.

Harvey feels that Stanley is getting out of control and wants him to move in with himself and Frieda for when they are married. However, Frieda's paintings attract the attention of Jewish gallery owner Adrian Horowitz, and she seems set on her own career.

Rita considers a divorce before going on holiday with Leo to the South of France following his mother's death.

Nan meets Geoff, an old flame now a widower, who proposes marriage to her.

As news spreads of Harvey's night with Rita, Nan is disapproving, Frieda feels betrayed and Harvey himself feels used since it nullifies all charges of adultery against his wife.

Maggie gets asked out by local stall-holder Alfie, who is also a talented boxer and there is a family outing to watch him win his fight.

Unexpected drama follows as Veronica goes into early labour and Ian from work declares that he is the father of her baby.

Erich dies suddenly and Frieda is amazed to get a visit from Joan Gottlieb, a Gentile who married Erich in Manchester before Frieda came to England, and has evidence that she lent him the money for his first bakery. As she is still his legal wife she is claiming her rights, including the house, but Harvey, using his professional contacts, learns from a Manchester lawyer that Erich separated from her and so she is entitled to nothing.

Rita's supplier, Alistair, offers her a partnership making face cream but she refuses when she finds that she is expected to do all the work. Leo hopes to get a shop in the West End with Rita but it falls through.

Having inherited Erich's house and money Frieda is now a wealthy woman and Harvey feels financially inferior, considering taking on the bakery but Frieda decides to sell it.

Nan marries Geoff and moves in with him and Veronica accepts Ian's marriage proposal, asking Rita to return the money she lent her for the salon. This means that Rita is now unable to put down the deposit on the house she wanted.

Alfie continues to do well in the ring, to Maggie's disapproval.