Source · Select Committees · Women and Equalities Committee
Recommendation 1
1
Acknowledged
UK statutory parental pay rates are inadequate, causing hardship and hindering take-up
Conclusion
The UK’s rate of statutory parental pay is completely out of kilter with the cost of living. At considerably less than half of the National Living Wage and real Living Wage, it has not kept pace with inflation and is far below rates in most comparable countries. This causes financial hardship, particularly in lower income households, and is a barrier to parents taking the time they need to care for their babies. The low rate particularly inhibits take up of the very limited amount of statutory leave available to fathers and other parents, a disproportionately high number of whom are entirely reliant on the inadequate statutory minimum. (Conclusion, Paragraph 30)
Government Response Summary
The government acknowledges the importance of parents taking time off and that the parental leave system can do more to support families. It notes the annual review of statutory pay and states that the recently launched parental leave and pay review, which will last 18 months, will consider all entitlements including statutory pay rates.
Government Response
Acknowledged
HM Government
Acknowledged
The government understands the importance of both parents being able to take time away from work to care for their new baby. We recognise the parental leave and pay system can do more to better support working families, in particular to enable balanced childcare choices that work for different families and promote gender equality in parenting. Currently, Statutory Paternity Pay is paid at the statutory rate of pay (£187.18 a week 25/26) or 90% of their income, whichever is lower. The government understands the importance of ensuring statutory pay is set at the right level. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and State Pensions, including statutory pay. This is based on a review of trends in prices and earnings growth in the preceding year. From April 2025, the statutory rate of pay was uprated in line with the September 2024 Consumer Price Index of 1.7 per cent, with the standard rates increasing from £184.03 to £187.18 per week. This means that statutory pay for parents retains its value against inflation. When considering calls to increase the level of parental entitlements, the Government must balance a range of factors including the needs of parents, the impact on employers, and affordability for taxpayers. As you recognised in your report, significant increases to the statutory rate of pay would mean a large increase to government spending and we must consider how to balance this. The government recognises that the parental leave system can do more to support working families and gender equality in parenting, which is why we launched a review of the parental leave and pay system on 1 July. All parental leave and pay entitlements will be in scope, including statutory maternity and paternity leave and pay. The review’s published terms of reference propose objectives for the parental leave and pay system, including improving both women’s labour market outcomes and reducing the gender pay gap, and ‘motherhood penalty’. We expect the review to run for a period of 18 months, and it will conclude with a set of findings and a roadmap, including next steps for taking any potential action.