Five things you need to know about parental leave in the UK
Written by Harriet and Katie, co-founders of Nugget Savings - the community on a mission to help create a financially secure parental leave for all.
As the mum of an 18-month-old and a single, childfree woman who’d love a family down the line, we both feel passionate about transforming the UK’s shoddy parental leave provisions. We also want to help educate people about what their rights are when it comes to mat and pat pay.
Many people don’t know the financial implications of parental leave until they’re planning on having a baby or have a baby on the way - and when they see how low statutory maternity pay is, they’re often shocked by the figure.
But while parental leave can feel like a very daunting concept, it doesn’t have to be. It’s important to remember that knowledge is power. By educating yourself about your rights and taking steps to plan ahead, you can feel more financially secure and prepared for this important time in your life.
So here are the key facts that you need to know:
Being employed doesn’t guarantee you maternity pay
First things first, check your dates to see what maternity pay you are entitled to. To qualify for statutory maternity or paternity pay, you need to have been employed for 41 weeks before the due date of your child. This means that if you’re pregnant before starting a new role, you won’t be eligible - even if you didn’t know at the time!
If this happens to you, you can apply for something called maternity allowance (which is a lesser amount). Similarly, if you’re self-employed, you need to have been registered as self-employed for 26 weeks in order to qualify for maternity allowance.
2. It’s very likely that you will need to save
Unfortunately, statutory maternity pay in the UK is very, very low. The first six weeks are 90% of your normal wage or £172.48 - whichever is higher.
From then, the next 33 weeks are paid at £172.48 a week - which is just 44% of the national minimum wage - upon which you still pay tax and national insurance contributions.
If you were looking to take the whole year off with your baby, the final three months are unpaid. With such a drastic drop in income, most families will need to save in order to live comfortably.
3. Paternity leave provisions in the UK are pants
Employed dads are only entitled to two weeks off with their newborn baby and the pay is £172.48 a week. Unless you have an enhanced paternity leave, you may want to save your annual leave days for spending time with your baby in their first months.
Self-employed dads are not entitled to any paternity pay.
4. You do accrue holiday on your maternity or paternity leave
We speak to so many parents who have been wrongly informed by their employers that they cannot “carry over” their holiday days from their parental leave. This is wrong.
You cannot take holiday days and maternity/paternity leave at the same time so, legally, they have to let you carry these over. If bank holidays are normally included in your holiday entitlement, as per your contract, you should be able to carry these over too.
5. Enhanced leave policies are not always what they seem
Employers can be notoriously vague about their parental leave policies. If your employer has told you they offer “enhanced” maternity or paternity pay then do look into the details of it.
The most common form of enhanced parental leave policy is full pay for the first six weeks of your leave. This is only 10% more generous than the government offer, so you will still need to think about saving if possible.
Although parental leave provisions in the UK are undoubtedly pitiful (just look at Sweden if you want to see how it should be done), knowing your rights is essential so you can leverage the time you do have to your advantage.
Encouraging men to get involved in this conversation is also key, as equality requires reducing the financial burden on women and sharing the responsibility of childcare with their partners.
By joining the conversation about creating better parental leave policies in the UK, you can help create a more equitable society where all parents have the time and support they deserve.
Finally, to all the parents on parental leave right now, we see you - and you’re doing an amazing job in very tough circumstances!
Nugget Savings was founded by Harriet and Katie - two women on a mission to transform parental leave pay. With a growing community of over 50,000+, Nugget helps everyone navigate the confusing world of maternity and paternity pay. Follow Nugget on Instagram here.