The Government recently announced a landmark review of the overall package of the parental leave and pay system in Great Britain. The intention behind the review is to consider the way in which it could be improved to better support working families while remaining viable in today’s economy. The review will look at maternity leave, shared parental leave, paternity leave and adoption leave, and their associated statutory pay.
The Government has issued a call for evidence to determine how well, or not, the existing system is meeting parents’ needs as well as being economically sustainable. The review is expected to take 18 months and the call for evidence from a wide range of institutions, businesses, trade unions, and parents is open until 25 August 2025. Evidence gathered will be considered in relation to the four objectives for review:
- Maternal health: a focus on supporting the physical and mental health, recovery, and wellbeing of women during pregnancy and post-partum.
- Economic growth through labour market participation: support economic growth by enabling more parents to stay in work and advance in their careers after starting a family.
- Best start in life: facilitate the best start in life for babies and young children, supporting health and development outcomes.
- Childcare: support parents to make balanced childcare choices that work for their family situation.
The call for evidence came three weeks after the Women and Equalities Committee (“WEC”) published a report calling on the Government to address the “broken” parental leave and pay system by addressing “fundamental failings” such as low levels of pay across the entire suite of statutory leave schemes, inadequate entitlement to leave for fathers and other parents, exclusion of many working parents and guardians, and unnecessary complexity of the shared parental leave scheme. The WEC’s report emphasised the need to move towards a more gender equal parental leave system.
Gender Inequality and Pay Gap
The UK has one of the most gender imbalanced parental leave and pay systems in the world. Subject to employment status, time in service, and earnings requirements, mothers are entitled to 6 weeks’ maternity pay at an uncapped rate of 90% of their average earnings followed by 33 weeks’ pay at the lower of 90% of their earnings or the statutory rate of £187.18 per week. Thereafter, mothers may take a further 13 weeks’ unpaid leave. A maximum of 2 weeks’ paternity leave and pay are available for new fathers and other parents, only at the lower of the same statutory rate or 90% of their average earnings. The average weekly earnings for women in 2025 now exceed £650, so taking statutory maternity leave and pay after the sixth week represents a significant pay cut for many working mothers. Many employers offer enhanced maternity and paternity leave and pay for employees but there is still a significant portion of workers entirely reliant on the statutory scheme of leave and pay. It is likely that the review will highlight that the difference in entitlements between mothers and other parents reinforces the outdated notion that childcare is primarily a mother’s responsibility and may even have contributed to the UK’s now increasing gender pay gap.
End Parenting Poverty highlighted that the widening gap between statutory parental pay, and the national living wage raises questions about how the Government supports new parents, as well as perceives the value of their contribution to society, particularly during a cost-of-living crisis. For a full time worker earning the National Living Wage, taking statutory parental pay would represent a pay cut of almost 60%.
The Maternity and Paternity Rights Survey (MPRS) series has monitored the take-up of maternity and family benefits and post-birth employment decisions since the late 1970s, with the last survey conducted in 2019 which was named the Parental Rights Survey (PRS). The PRS found that over 80% of mothers take maternity leave. Uptake of maternity leave is higher among mothers who are older, full time employed or in education, on higher incomes, and who have been working at their jobs for longer periods of time. Uptake of maternity leave is lower among non-employees (workers) and self-employed mothers, as well as those on lower incomes. 2 weeks of paternity leave are earmarked for fathers and other parents – the leave and pay entitlement being the worst in Europe – and still only 59% of fathers and other parents took paternity leave. The reasons stated for fathers not taking paternity leave tended to be that they could not afford to or that they were not entitled to any leave. The low rate of statutory pay is a leading factor in low uptake of paternity leave, with the majority of other parents taking paternity leave being higher earners. Mothers who do not qualify for statutory maternity pay by virtue of being a worker or self-employed, a low earner, or not having sufficient length of service may be eligible for Maternity Allowance. There is no equivalent to Maternity Allowance for fathers or other parents which renders those parents unable to access income support. This year, Dad Shift, a group campaigning for better paternity leave in the UK, found that in predominantly male self-employed sectors such as construction, 1 in 3 new fathers did not take any time off following the birth of their last child.
Shared Parental Leave
In 2015, the Government introduced the Shared Parental Leave (SPL) scheme which allows mothers to ‘give up’ and transfer part of their maternity leave and pay to the child’s other parent. Parents can share up to 50 weeks of leave and 37 weeks of pay within the first year of the child’s birth or placement with the family in cases of adoption and surrogacy. Shared parental pay (ShPP) is paid at the lower of 90% of their earnings or the statutory rate of £187.18 per week.
The scheme was supposed to be a modern, flexible way of arranging childcare and increasing fathers’ and other parents’ involvement at the early stages. It aimed to address gender pay gap concerns by allowing mothers to return to work while maximising the household’s overall entitlement to leave and pay. Mothers will usually be financially better off on maternity leave and SMP for the first six weeks and they have to curtail maternity leave to create leave and ShPP for the other parent. In practice, the requirement for the mother to transfer part of her leave to the other parent has been criticised as being a deterrent to both mothers and their partners from using the scheme. Mothers whose employers offer enhanced maternity benefits may have to sacrifice those benefits in order to create leave and pay for the other parent, whose employer may not offer any enhanced benefits. Mothers are also protected from direct discrimination and victimisation under the Equality Act 2010 from pregnancy until the end of their maternity leave. For mothers wishing to share their maternity leave by converting it to SPL, there is often a trade-off between doing so and enjoying enhanced maternity benefits which their partner’s employer may not be able to match and giving up legal protection from unlawful conduct or unfavourable treatment. For other parents wishing to contribute to childcare, there can also be a trade-off with maintaining household income at a minimum level. Parents are disincentivised from using the scheme – both a cause and consequence of the gender pay gap – and women continue to do the lion’s share of the childcare which can adversely impact career progression and earning potential.
Not surprisingly, the scheme has also been criticised for the complexity of its eligibility criteria, which exclude many parents (such as self-employed partners) and are difficult to understand not only for individuals seeking to take it but for employers as well. It also has burdensome administrative processes including co-operation of and co-ordination between both parents’ employers. The SPL scheme has had persistently low levels of uptake, with only 5% of eligible fathers and other parents having accessed the scheme in 2023. The Government’s evaluation of SPL found that financial constraints were a significant barrier to uptake of SPL with 33% of claims for ShPP from parents with the highest incomes, and 0% of claims for SPL were from parents with the lowest incomes. ShPP is significantly out of sync with the cost of living and national living wage. It is likely that evidence gathered by the Government in this review will call for a significant uplift in the rates of ShPP which would incentivise uptake of the scheme and bring parenting responsibilities nearer to equality.
Employment Rights Bill
Employers are already expecting unprecedented changes to a wide range of employment law in the near future. Two significant changes in respect of paternity leave and unpaid parental leave are expected to come into force in April 2026. Fathers and other parents must currently have 26 weeks’ continuous service to take paternity leave and pay. The Government has committed to legislating to make statutory paternity leave a Day One right for employees, bringing it into line with maternity leave. The reforms do not go as far as to making paternity pay a Day One right, so employees wishing to take Day One paternity leave will have to do so unpaid, which is unlikely to encourage partners to take this leave unless they can afford to do so. Any findings following this call for evidence may point towards the reforms only partially addressing the disparity between maternity and paternity leave and pay.
Employees can take 18 weeks’ unpaid parental leave in respect of each child and adopted child up to the child’s 18th birthday. The current eligibility requirements mean that only employees with at least one years’ continuous service can take unpaid parental leave. The Employment Rights Bill will also make it a Day One right.
A further change in respect of parental bereavement leave and pay is expected to come into force in 2027, extending the right to bereavement leave to parents who experience pregnancy loss of a baby before 24 weeks. For more information on these changes please see our recent publication: Employment Rights Bill set to improve rights of parents impacted by pregnancy loss | Thorntons Solicitors.
Employers should be aware of these changes and prepare for a possible increased uptake in these types of leave. Statistics have shown year on year that the uptake of paternity leave is poor compared to that of maternity leave. Whether making paternity and unpaid parental leave Day One rights increases job mobility as historically parents hesitate to change jobs to avoid losing their right to parental leave, we will have to wait and see. Employers will be legally obligated to facilitate employees taking statutory leave which will include updating handbooks and policies to ensure line managers and HR personnel are prepared to advise employees on their statutory entitlements.
For further advice on statutory parental leave schemes or any other employment law issues, please contact the Thorntons Employment Law team on 03330 430350.
