The £65,618 cost of motherhood

Latest data from the Office for National Statistics (ONS has shown working mothers lose an average of £65,618 in pay by the time their first child turns five, as the ‘motherhood penalty’ impacts their financial security.

Women’s earnings fall an average of 42%, or £1,051 a month, compared to what they were making a year earlier. Over five years, women have lost an average of £65,618 in pay after having their first child, £26,317 after their second and £32,456 after their third.

The biggest losses are in the first year, when they may take at least some parental leave. Mums miss out on £1,553 a month on average in the first year after the first birth, £965 after the second and £665 after the third.

However, even after this leave is completed, the impact lingers. They lose between 38% and 42% of earnings between one year and five years after the birth of a first child.

Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, said “The cost of motherhood is an alarming £65,618 – even before you consider the eye-watering expenses associated with a new baby. Women are far less likely to work in the five years following the birth of any children. Those who do work may take on fewer hours and might adopt flexible working, which means they run a real risk of missing out on promotions and pay rises compared to their full-time office-based counterparts. The impact is profound and far-reaching.

“The gender pay gap is almost non-existent when we start our careers. In fact, because women tend to do better academically than men, they tend to be paid slightly more on average at the start. The problem is that throughout the rest of their lives, women are hit by all sorts of inequalities which leave them lagging horribly behind.

“The pay gap doesn’t open at the age women typically have their first child. It starts a few years later, either when they have a second, or when they begin to work flexibly around caring responsibilities. From this point on, men start to outpace women dramatically on the pay front, as they pick up promotions and pay rises while women are juggling home and work life. This puts women on the back foot throughout their careers. It means that often when a couple’s parents need more support later in life, women are far more likely to be in the frame to look after them, making yet more career sacrifices. Some of this is societal, and some is based on the fact that statistically women will tend to earn less than their partner at this age, so the couple will lose less income if she stops work than if he does.”