Government review of parental leave system launched

At the beginning of July, as part of its Plan to Make Work Pay, the UK government launched a full review of the statutory parental leave system.

The review will look at all types of leave and pay for parents including maternity, paternity, adoption and shared parental leave and pay.

Government review

The government has published terms of reference for its comprehensive review of the parental leave system. 

The first stage of the review is a public call for evidence which seeks information on whether the current system meets the objectives of:

• Supporting maternal health
• Enabling more parents to stay in work 
• Providing leave and pay which supports parental wellbeing and gives children the best start in life
• Supporting parents to make balanced childcare choices

The call for evidence closes on 25 August 2025.

The government has also published a summary of existing evidence on parental leave provision and usage.

What changes are needed to the current system?

The Women and Equalities Committee (WEC) published a report last month on the “broken” statutory parental leave system and stressed that the government review must address the “fundamental failings” in the parental leave system.

The WEC has called for increased statutory leave and pay levels and warned that the current provision for fathers “entrenches outdated gender stereotypes about caring and harms fathers, mothers and families”.

It has made a number of recommendations which aim to create a more equitable and supportive parental leave system which addresses the needs of diverse family structures and promotes gender equality to benefit mothers, fathers and families – including:

• Increasing statutory pay:
  • Statutory paternity pay increases to the level of maternity pay in the first six weeks (i.e. 90% of average earnings)
  • In the longer-term, phased increases to statutory pay across the system to reach at least 80% of average earnings
  • Introducing a paternity allowance equivalent to maternity allowance for self-employed fathers
• Extending paternity leave:
  • Incrementally increasing the period of paid statutory paternity leave to six weeks over the course of this Parliament
  • Ensuring maximum flexibility in how leave can be taken in the first year after a baby’s birth or adoption
• Reforming shared parental leave (SPL)
  • Simplifying or removing the complex eligibility criteria for SPL
  • Consider introducing financial incentives to increase take up of SPL, such as additional paid leave to couples in which both parents take a substantial portion of leave
• Supporting kinship carers and single parents
  • Including kinship carers (typically family members or friends who step in to care for children) in the paid parental leave system, similar to adoption leave and pay
  • Allowing single parents to reallocate some or all of the entitlements of co-parents to nominated family friends or relatives
• Addressing multiple births
  • Consider providing extra paid leave for parents of multiple births, drawing on lessons from overseas systems

The WEC expects the review to lay the foundation for progress in the key areas it has identified over the course of this Parliament and in the longer term.

What next?

Over the last few years, many employers (including Clyde & Co) have chosen to simplify their leave provisions for new parents outside the statutory framework. These employers have moved away from the detail of managing maternity leave alongside shared parental leave by introducing equivalent family leave policies which provide mothers and fathers with the same discretionary benefits. 

The WEC report noted that the current parental leave system promotes gender inequality and contributes to the gender pay gap and emphasised that the government should have gender equality “at its heart”. However, it remains to be seen whether this review will lead to a parental leave system which is less gender focused.  

The review is expected to run for 18 months so it is unlikely the government’s proposed reforms will be announced before the end of 2026. 

In the meantime, day one rights to paternity leave and unpaid parental leave (introduced in the Employment Rights Bill) are expected to come into effect from April 2026. 

Looking well into the future, we remain of the view that at some point the various (complex and differentiated) family leave entitlements provided for by the state will be entirely reformed to be replaced by one “new parents” set of rights.  Until then it seems likely employers and employees will continue to have to deal with differentiated rights (outside of, as set out above, any discretionary provision).