New figures from the Office for National Statistics (ONS) make stark reading for families planning for their long-term finances. On average, five years after having a first child, mothers’ monthly earnings are 42% lower than the year before the birth, a reduction of about £1,051 per month. This represents a cumulative earnings shortfall of around £65,618 over that five-year period. 

The ONS also estimates that the arrival of a second or third child brings further, though smaller, reductions of roughly £26,317 and £32,456 respectively over the same timeframe. 

The probability of being in paid employment also declines, with the sharpest drop, about 15 percentage points, occurring around a year and a half after the first birth. Although some mothers return to work, many remain on lower earnings or reduced hours even five years later. 

These findings confirm what many already know from experience: childrearing can come with a long-term financial cost to mothers. 

Long-Term Plans 

The ‘motherhood penalty’ is worryingly long-lasting and substantial. For families thinking about how to plan for the future, the challenge is not just the immediate impact on household income but also the long-term effect on savings, pensions, and retirement security. 

One of the first areas to consider is pension saving. When a mother’s earnings fall or stop altogether, her pension contributions often reduce at the same time. Over a career, even a few missed years of contributions can significantly erode retirement savings, particularly for the lower-earning partner. 

Where possible, continuing contributions, even at a lower level, can help keep retirement plans on track. Partners can contribute up to £2,880 per year to their non-working spouse’s private pension. 

Checking the rules of workplace schemes is important, as some allow voluntary top-ups or the option to catch up on missed years. If pension contributions are difficult to maintain, it can still be valuable to build savings in other tax-efficient ways, such as through an Individual Savings Account (ISA). 

National Insurance (NI) contributions are also critical for securing the full State Pension. Mothers who stop working or reduce their hours may no longer meet the earnings threshold to build up qualifying years automatically. 

Families should ensure that the mother is receiving NI credits where eligible, for example, through Child Benefit registration or caring responsibilities. If credits are not available, it is sometimes possible to make voluntary contributions to fill gaps. 

Beyond pensions and NI, families might also consider how to diversify their wealth. Saving into ISAs or other investment accounts can provide flexibility when one parent’s income is reduced. 

Building a modest emergency fund can help absorb unexpected costs and avoid disrupting long-term plans. Reviewing life insurance, critical illness cover, and income protection may also be worthwhile to ensure financial stability if circumstances change further. 

The ONS data underline that childbirth can impose a serious and lasting financial penalty on mothers. However, with early planning and deliberate action, the long-term impact can be mitigated. 

Families who want to ensure that reduced earnings during the child-rearing years do not derail their retirement and wealth-building goals should consider seeking advice from a qualified financial planner. 

Professional guidance can help families structure their finances, take advantage of tax allowances and contributions, and create a plan for long-term growth.