Government launches full review of parental leave and pay

The Government has launched a comprehensive review of the parental leave and pay system, which will look at all types of family leave, including maternity, paternity and shared parental leave. To inform the review, the Government has issued a “call for evidence” (open until 25 August 2025) to test the objectives set out in the terms of reference and to better understand the extent to which the current system supports these objectives. The review is expected to run for 18 months, concluding with a report of key findings and a roadmap for potential reform.

Why is this on the Government’s agenda?

The current system for parental leave and pay has grown incrementally over time, starting with maternity leave, and expanding to include other types of leave (including paternity, adoption, and shared parental leave). The Government has described this as a “complex landscape” which was “never holistically designed to operate as a single ‘system’”. 

Recent research has suggested that only one in three fathers currently take paternity leave because of financial concerns. Meanwhile, the previous Government’s 2023 evaluation of shared parental leave found that take up was only 5% among eligible fathers.

Last month, the Women and Equalities Select Committee published a report that supported the case for reform. It concluded that the UK has one of the most gender unequal statutory parental leave systems in the developed world, which “reflects and entrenches the norm that mothers overwhelmingly bear these responsibilities” and is a key driver of pregnancy and maternity discrimination and the “motherhood penalty” for women in employment.

What reforms are already included in the Employment Rights Bill?

The Employment Rights Bill includes plans to make paternity and unpaid parental leave “day-one” rights. It will also enable paternity leave and pay to be taken after shared parental leave and pay. The recently published implementation roadmap anticipates that these measures will come into effect in April 2026. Looking further ahead, it is proposed that additional rights for pregnant workers and in relation to flexible working will come into effect in 2027.

What is the review trying to achieve?

The terms of reference identify the following objectives (which are expected to evolve over the course of the review) against which the current system will be assessed:

1. maternal health: support maternal health through sufficient time away from work with an appropriate level of pay
2. 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
3. best start in life: facilitate the best start in life for babies and young children by ensuring sufficient resources and time away from work for parents
4. childcare: support parents to make balanced childcare choices that work for their family situation, including enabling co-parenting and providing flexibility

What should employers be thinking about now?

In the short(er) term, employers will need to keep an eye out for the implementation of the measures contained in the Employment Rights Bill, the earliest of which are currently expected to be implemented in April 2026.

The review of parental leave and pay is currently in its infancy; given the timetable, we are not likely to have a first look at proposed reforms until 2027. It is therefore not yet known whether we will end up with wholesale reform or further incremental changes. Given the identified rationale for reform, employers might wish to use this time to ensure they have a clear understanding of the position in their workforce now. For example:

• What is the take-up of paternity leave and shared parental leave? In each case, what are the barriers to that leave being used?
• What is the rate of leaving the workforce amongst new parents, and new mothers in particular? What reasons are given for any departures?
• How is your flexible working policy being used by working parents?

We will continue to monitor developments and publish relevant blogs to help employers prepare for upcoming reforms.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2025