Following the eliminations of Simpson in week 1 and Smith in week 2, Bailey became the last over 25 in the competition. On 8 December, she made it to the final along with Nicholas McDonald and Luke Friend. On 14 December, she duetted with Scherzinger on "And I Am Telling You I'm Not Going". The following night, she sang her winner's single, a cover of "Skyscraper" by Demi Lovato. Later, having received more than 1 million votes over the course of the weekend, she was announced as the winner. When the voting statistics were announced on The X Factor afterwards, Bailey was revealed to have received the most public votes seven times out of ten. As the winner, she received a £1 million recording contract with Syco Music and the opportunity to support Beyoncé on the UK leg of The Mrs. Carter Show World Tour in February 2014. Bailey was reportedly due to support Beyoncé at ten shows, but that figure was cut down to just one due to The X Factor Live Tour. Her sole show with Beyonce was in Birmingham on 24 February 2014.
In an interview with the Official Charts Company after "Skyscraper" topped the charts, Bailey said, "2014 is going to be a huge year for me. Basically, I'm in the studio pretty much straight away. We're hoping to get an album out for spring. On the album, I'm going to try and do things a little bit differently." On 21 January 2014, Bailey tweeted that her debut album would be called The Power of Love, named after the Jennifer Rush song which Bailey covered for the album. It was later revealed that the album would be released on 24 March 2014, and contain both cover versions and original material. On 22 January, Bailey appeared at the 19th National Television Awards and sang "The Power of Love". She also performed a duet of "Ain't No Mountain High Enough" with Michael Bolton. This duet is also featured as one of the tracks on the album. Another duet on the album is "And I Am Telling You" with Scherzinger, which Bailey originally performed on the X Factor final.
On 18 February 2014, the song "Compass" received its debut airplay on BBC Radio 2. On 30 March, the album debuted at number one on the UK Albums Chart, making Bailey the first X Factor winner to have a number-one album since Alexandra Burke topped the chart with her debut album Overcome in October 2009. The album sold 72,644 copies in its first week, making it the fastest-selling album of 2014 in the UK at the time, overtaking Pharrell Williams' Girl. In support of the album, Bailey will go on her first headline tour in January and February 2015. The tour will comprise fifteen shows and will begin at the De Montfort Hall in her hometown of Leicester.
The album was re-packaged and re-released on 1 December 2014. The re-issue featured five new tracks — including three Christmas tunes and a reworking of original song "Treasure". As well as the festive songs ("Silent Night", "Please Come Home for Christmas" and "O Holy Night"), the album also included "With You" from Ghost the Musical.
On 6 March 2014, Bailey announced that she was 10 weeks pregnant with her third child. She tweeted her first ultrasound scan, alongside the caption "Hey everyone...... Meet peanut!!!" At 10:50am on 10 September 2014, Bailey gave birth to daughter Miley Beau. Former mentor and friend Sharon Osbourne is Miley's godmother. In October 2014, Bailey announced via Twitter she is suffering Bell's palsy following Miley's birth.
In June 2014, Bailey announced that she had signed a deal to release her autobiography Daring to Dream. It was released in November 2014.