Mums still earn 42% less five years after first child: "Motherhood penalty is real and lasting"

FINANCIAL experts have said “the motherhood penalty is real and lasting” as new data shows they still earn 42% less five years after their first child in the UK.

The ONS has today revealed “staggering” new data on the effect of motherhood on earnings and employment.

It showed 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%, or £1,051 per month, compared with earnings one year before the birth. 

The total earnings loss over five years amounts to an average of £65,618 following the birth of a first child, £26,317 following the birth of a second child and £32,456 following the birth of a third child. 

Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said significant culture shifts need to happen for this to change.

She said: "The ONS data shows the motherhood penalty is real and lasting, with women still earning 42% less five years after their first child. In practice, I see how decisions around childcare funded hours, tax-free childcare and days worked weigh heavily on parents — but disproportionately on mothers, who remain the primary caregivers in many households. 

“To change this, we need more than better childcare support. Parental leave must be rebalanced for both sexes, so fathers are equally enabled and expected to take time off. That shift needs to come from both government policy and workplace culture, so caring isn’t seen as a ‘women’s issue’ but a shared family responsibility. Only then will we start to close the gap.”

Jo O'Connell, Owner at JellyRock PR, said she was pushed out of her job after she had a child.

She continued: “My daughter was only six months old when I was made redundant by a charity who wanted to replace me with someone who would work day, night, and weekends simply for the love of the job. It was a cynical move and they did indeed get someone who eventually burnt out due to the workload. 

"For me, there was no going back into employment after having my first child. There was no point. The figures didn’t stack up. Childcare was pricey 10 years ago - it's extortionate now. As a result, I set up my own PR company, earned the money I deserved and have never looked back. 

"Did I sacrifice time with my baby as a result? Sadly, absolutely. Does she now see me as a confident business role model? 100%. But building a business on your terms as a mother can be one of the most fulfilling things you do.”

Debbie Porter, Managing Director at Bakewell-based Destination Digital Marketing, said she had first hand experience.

She added: "As a lived experience, the ramifications of having two children are still being felt by me 18 years later. To have a child, you need to take time off. To take time off, you accept a reduction in earnings. 

"In a Utopia where we are all happy, nuclear family units, the other parent (usually a male) takes up the earnings slack to allow the primary caregiver (usually a female) to care for their child, or as a compounded issue, multiple children. As we all know, we aren't all happy, nuclear families. 

"A fifth of couples separate within a year of birth, which has significance on the long-term financial prospects for women. It's even worse for people who never got married, and who then have no claims on future pensions, or a right to support in the way divorcees do. 

“Having children is expensive, and the government needs us to keep having them, so the best thing they can do is to stop with the barrage of tax hikes to help us all try and future proof our old ages instead of living hand-to-mouth.”

Gosia Dawson, Director at Glade Financial, agreed, adding: "The ONS data confirms what many women know too well: motherhood has a lasting impact on earnings. This isn’t just about short-term loss but the long-term effect on pensions, savings, and financial independence. To address this, we need both systemic and cultural change. 

"Affordable, high-quality childcare is key, and it should be seen as a shared household cost, not one that mothers are left to absorb. Policies that promote flexible working and shared parental leave can also help balance the load. 

“Women can protect their financial future by maintaining pension contributions where possible and having open conversations at home about income and savings. But ultimately, this is not a problem women should solve alone. Government and employers must step up with policies that reduce the motherhood penalty, because investing in mothers’ economic participation benefits everyone.”

Anita Wright, Chartered Financial Planner at Ribble Wealth Management said “the data from the ONS is sobering but hardly surprising”. 

She added: "First, there is the matter of time and prioritisation. Having a child fundamentally reorders a woman’s life. Mothers, far more than fathers, are still disproportionately the ones who scale back hours, decline overtime, or step off the promotion track. 

"Second, there is the compounding career effect. Five years out of the fast lane doesn’t mean you simply lose five years’ worth of salary – you lose momentum, you lose networking, and you lose access to the projects that propel earnings higher. Third, there’s the structural rigidity of workplaces. 

“We have organisations still designed around the idea of a male breadwinner who can devote himself fully to work. Women themselves often internalise a recalibration of priorities after birth. Many willingly trade maximum income for stability, proximity to home, or time with their child. That is an entirely valid choice, but it has financial consequences.”

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, pointed out that the UK's fertility rate showed how women are being put off from having kids.

He said: "The UK's fertility rate of 1.44 is well below the replacement level at 2.1, yet we've created structures that financially devastate families for having children. When parenthood means accepting massive earnings losses and career derailment, and property prices make stepping onto the housing ladder more and more difficult, declining birth rates are inevitable. 

"The UK is pricing itself out of demographic viability while ageing populations strain pensions and healthcare. Solutions must be bold, for example, shared parental leave with ‘use it or lose it’ father quotas, like in Sweden and Iceland. Affordable childcare especially for under-2s, genuine flexible working at all levels, and direct financial recognition that child-rearing benefits society broadly. 

"The current system is unsustainable. Either we restructure work and support systems to make parenthood viable, or accept continued decline and its consequences for economic growth and social cohesion."

Steve Witt, Co-founder at Not Just Travel, said women being held back was bad for the economy.

He added: "Around 65% of our travel consultants are women. Of our top financial performers, over 82% are women. We’re unusual in the travel industry as we recruit people with no prior experience in selling travel. 

"As a result, we recruit a lot of female franchisees who build businesses around their young families. As many clients want to discuss and plan their holidays in the evenings and weekends, a travel franchise is a family friendly option for home-based entrepreneurs. 

“Our female members never cease to impress me with their resilience, their tenacity and sheer determination to succeed. Increasingly we’re seeing more women take control of their careers and be their own boss by transforming themselves into personal travel consultants, giving them the flexibility to work whenever and from wherever they choose, booking bespoke and packaged holidays - be that in between childcare demands – or while travelling the world."