Maternity leave and maternity pay
Having a baby is a wonderful experience, but becoming a parent can also be quite stressful. There are many considerations when deciding if you can afford to have a baby, including your finances and your job. Fortunately, in the UK, there are laws in place to protect you and your family during this time. Statutory Maternity Leave and Pay are two of the most important benefits available to new mothers.
What is Statutory Maternity Leave?
Statutory Maternity Leave is the legal minimum amount of time that you can take off work before and after your baby is born. You’re entitled to 52 weeks of Statutory Maternity Leave, if you meet the following criteria:
- earn on average £123 a week;
- give appropriate notice and proof of pregnancy; and
- have worked for your employer for at least 26 weeks.
You can start your maternity leave as early as 11 weeks before your due date. If your baby is born early, your leave will start the day after the birth. You must take at least two weeks off work after your baby is born.
Ordinary Maternity Leave - covers the first 26 weeks of your leave and if you go back to work during this period you can return to the exact same job you had before leaving to have a baby.
Additional Maternity Leave - covers the last 26 weeks and your rights change slightly during this time. If you go back to work during this period you can return to the same job, but only if it’s available. If it isn’t your employer has to offer you a similar job with the exact same pay and conditions.
While you’re on maternity leave, you still have all the employee rights that you normally get from work. This includes paid holiday, protection from unfair dismissal, employer pension contributions, and more.
What is Statutory Maternity Pay?
Statutory Maternity Pay is the legal minimum amount of money that your employer has to pay you while you’re on maternity leave, if you’re eligible. You’re eligible for Statutory Maternity Pay if you earn at least £123 a week on average and have worked for your employer for 26 weeks when you reach the 15th week before your due date.
If you’re taking maternity leave, it’s a good idea to check how your employer’s parental leave policy compares to Statutory Maternity Pay and Leave.
- Statutory Maternity Pay - for the first six weeks of your Maternity Leave you’re entitled to 90% of your average weekly income before tax. For the following 33 weeks you’re entitled to £172.48 or 90% of your average weekly income, whichever is lower.
If you’re self-employed or don’t qualify for Statutory Maternity Pay, you may be able to claim a Maternity Allowance. This is a benefit paid by the government.
- Maternity Allowance - you can claim £172.48 or 90% of your average weekly income, whichever is lower for the full 39 weeks. If you haven’t paid enough National Insurance you may be limited to an allowance of £27 a week for the 39 week period.
Statutory Maternity Pay is paid in the same way as your wages, in either monthly or weekly payments.
How to claim Statutory Maternity Leave and Pay
To claim Maternity Leave and Pay, you must tell your employer that you’re pregnant and when you want to start your leave and pay. You should do this at least 15 weeks before your due date, or as soon as possible if your baby is born early.
You’ll need to provide proof of your pregnancy, such as a letter from your doctor or midwife or a MATB1 certificate. Your employer will then confirm how much maternity leave and pay you’re entitled to and when they will start and end.
Rights when returning to work after having a baby
When you’re ready to return to work after having a baby, you need to give notice to your employer. The notice period depends on how long you have taken off work:
- If you’ve taken Ordinary Maternity Leave or less than 26 weeks of maternity leave, you need to give at least eight weeks’ notice.
- If you’ve taken Additional Maternity Leave or more than 26 weeks of maternity leave, you need to give at least 16 weeks’ notice.
Returning to work after having a baby can be a daunting prospect, but you have rights. You’re entitled to return to the same job you had before you went on maternity leave, and you have the right to ask for flexible working arrangements if needed.
If you think your employer isn’t giving you the maternity leave and pay that you’re entitled to, or is treating you unfairly because of your pregnancy or maternity leave, you can take action.
You can try to talk to your employer informally or raise a grievance. You can also get advice from your trade union, an employment adviser or a legal adviser. If the problem isn’t resolved, you can make a claim to an employment tribunal.
Additionally, it’s important to protect your workplace pension after having a baby. There are steps you can take to ensure that you continue to build your pension - even while on maternity leave.
Protecting your workplace pension after having a baby
If you’re taking time out for parental leave, you can still contribute to your workplace pension. But if you stop making contributions, the employer contributions may also stop. So if you or your partner can afford to continue paying into your pension while you’re taking time off, it’s worthwhile.
PensionBee created the Carer’s Pension Gap report to uncover how care moments, such as having children, can impact pension savings. One finding was that for every year of paid work missed, the loss to a pension pot’s an estimated £5,000, on average.
This is the case if your workplace scheme is a defined contribution pension. Personal contributions are based on your Statutory Parental Leave pay, not your full salary. Employers can also continue to make contributions and these will usually still be based on your full salary.
Life insurance and wills
If your family’s expanding, you may wish to review your life insurance policy. This will ensure your family’s protected in case of an unexpected event. And if you haven’t already, make sure you create and maintain a will.
The transition to parenthood will be a rollercoaster, but support is available. Preparing your finances as much as you can in advance goes a long way for new parents.
Wondering how raising children impacts your personal finances? Listen to episode 19 of The Pension Confident Podcast and hear from our guests as they discuss wills, life insurance, pension beneficiaries and more. You can also watch the episode on YouTube or read the full transcript.
If you’re interested in learning more about looking after family members, what to do when expecting a baby, or family problems like illness, divorce or bereavement, head to our Family and Care section.
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Last edited: 30/10/2023