Legal update
Government review of parental leave and pay
The Government has launched a full review of the parental leave and pay system to consider how existing entitlements may be improved to better support working families and the modern economy. The review will last 18 months with conclusions and recommendations expected in January 2027.
On 1 July 2025, the Government launched a full review of the parental leave and pay system. The review has come as part of its “Plan to Make Work Pay” and seeks to consider ways in which the system can be improved to better support working families and our modern economy.
In the Government’s terms of reference, it notes the complexity of the system as it currently is, having started with maternity leave and pay and then further parental leave and pay rights being incrementally added. Instead, the review aims to have a more holistically designed system, where the collection of rights operates as a single system.
The review will therefore consider:
- maternity leave and pay
- paternity leave and pay
- adoption leave and pay
- shared parental leave and pay
- parental bereavement leave and pay
- parental leave (unpaid)
- neonatal care lave and pay
- maternity allowance
- bereaved partner's paternity leave (unpaid) (Note: this right is in development and the Government aims to bring the entitlement into force in 2026).
The Government's terms of reference set out four objectives against which change for reform will be considered:
Maternal health
Support the physical and mental health, recovery and wellbeing of women during pregnancy and post-partum by giving them sufficient time away from work with an appropriate level of pay.
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, particularly to improve both women’s labour market outcomes and the gender pay gap, reduce the ‘motherhood penalty’, and harness benefits for employers.
Best start in life
Ensure sufficient resources and time away from work to support new and expectant parents’ wellbeing and 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, including enabling co-parenting, and provide flexibility to reflect the realities of modern work and childcare needs.
The Government’s review will also look at wider cross-cutting issues and themes, such as whether the support available meets the needs of other working families who do not qualify for existing leave and pay entitlements (e.g. self-employed parents); balancing costs and benefits to both businesses and the exchequer; and social considerations such as supporting the child poverty strategy and shifting social and gender norms, for example around paternal childcare.
The review commenced on 1 July 2025 and is expected to last around 18 months, so the conclusions and recommendations of the review are set to be released in January 2027. The conclusions will also include a roadmap, including next steps for taking any potential reforms forward to implementation.