The financial impact of parenthood on women’s earnings has been revealed, reigniting debate around the ‘motherhood penalty’ and what employers can do to mitigate it.
Fresh analysis from the Office for National Statistics (ONS) shows that having children leads to a substantial and long-lasting reduction in mothers’ earnings. Five years after the birth of a first child, monthly earnings were reduced on average by 42 percent, equivalent to £1,051 per month, compared with earnings one year before the birth.
The cumulative loss is striking. The total earnings loss over five years amounts to an average of £65,618 following the birth of a first child, £26,317 after a second, and £32,456 following the birth of a third. Reduced employment plays a significant role, with the probability of paid employment dropping for five years after the birth of a first child.
ONS found the largest fall occurred around 18 months after birth, with employment probabilities down by 15 percentage points compared with the year before birth.
‘Even worse than I thought’
Campaigners say the figures underline how entrenched the motherhood penalty has become. Joeli Brearley, founder of Pregnant Then Screwed, said: “Mothers lose an average of £65,618 over five years when her first child is born. If she has a second baby, she loses a further £26,317 over five years. If she has a third baby, she loses a further £32,456 over five years.
“That is a loss of £124,391 if a woman has three children. Meanwhile men’s earnings are unaffected. I knew it was bad, but honestly, it is even worse than I thought.
“This will be worse for women with disabled children, Black women, women with Bangladeshi, Indian or Pakistani heritage, single women, and women living in certain locations.”
Long-term impact
Kelly Parsons, head of pension proposition at Broadstone, said the figures expose the scale of what she describes as a “mum tax”, which acts as “a financial straight jacket that continues to tighten years after childbirth”.
Parsons added: “Losing more than £65,000 in earnings in just five years after a first child is a serious structural issue with long-term implications for gender pay equality, pension saving and economic growth.
“If we want to close the gender pay gap, we must move beyond acknowledging the motherhood penalty and start designing policies that dismantle it, from more affordable childcare and flexible working, to support that ensures women don’t pay the price of parenthood with their financial security.”
She also warned of the knock-on effect on pensions.
“Beyond the immediate earnings loss, the ‘mum tax’ has a compounding effect on long-term financial wellbeing. Reduced pension contributions during early career years can significantly impact retirement outcomes. Financial education plays a critical role in helping women understand these implications and take proactive steps, whether through catch-up contributions, understanding employer schemes or leveraging flexible benefits.”
Cultural change
The data has also prompted reflection on how workplace culture shapes parents’ experiences. Charlotte Neal, employee experience specialist at Reward Gateway Edenred, described the findings as “a concerning picture” that frames family life as detrimental not just for mothers, but for fathers and employers too.
Neal said: “Financial strain leading to exhaustion and burn-out are just the cusp of this problem, and only fuels the productivity puzzle that the economy is facing. Organisations and governments alike should understand that there can’t be a parenthood penalty.
“Fathers should be given the choice to take time off to look after and bond with their child without hampering their financial security, so mothers can get back into work without taking prolonged periods of time off, which ultimately impacts their earning potential.”
She added: “Having a culture of appreciation and recognition, as well as meaningful benefits, makes businesses more attractive and fosters deeper engagement and effort. Workplaces where you’re a human being before you are an employee. Unfortunately, we have a long way to go before this is a reality.”
