The true cost of the “motherhood penalty”

The ONS said that five years after the birth of a first child, monthly earnings were reduced on average by 42 per cent, or £1,051 per month, compared with earnings one year before the birth.

It added that 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.

According to the ONS, part of this drop in earnings is the result of a reduction in employment. The probability of paid employment was significantly reduced for five years after the birth of a first child, compared with one year before birth. The probability of paid employment was also significantly reduced after a second and third 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.”

Clare Moffat, pensions expert at Royal London, commented on the “pension mountain” many women need to climb when it comes to saving for later life. She said: “Despite progress in workplace equality, the gender pensions gap remains a persistent issue, shaped by career breaks, part-time work, lower average earnings, and longer life expectancy.

“According to analysis by Royal London, the financial impact of motherhood means women can miss out on pension savings of nearly £92,000 over 12 years by juggling caring responsibilities and working part-time. And the consequence of leaving work altogether for the same period can create a gigantic £183,000 hole in pension savings.

“It’s not as easy as simply encouraging people to save more, we need to focus on making the system work better for everyone. That means addressing the structural barriers that hold women back from earning more during their working lives and building up pensions for their future lives. We also need to improve awareness and encourage greater engagement with pensions to help more women build a securer retirement.”