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Lost pay putting men off paternity leave

Fathers are being deterred from taking paternity leave because of lost earnings to the family budget, according to a new report on flexible working by the think tank Demos.

The think tank’s poll of 1,500 employees found that only one in ten men say they would use a longer period than two weeks of paternity leave.

In the UK only half of men take the two week’s leave they are entitled to, often citing the fact that statutory paternity pay covers less than 25% of their salary.

The Reinventing the Workplace report found that under the new transferable leave, average-waged fathers who take six months’leave stand to lose 88% (£13,000) of their earnings the year their child is born. This is added to the mother’s lost earnings of £6,500.  

Demos warns that this not only prevents fathers from playing a prominent role at home, but can act as a barrier to getting mothers back into work following pregnancy. A mother on an average wage who takes full maternity leave will be 72% worse off in the first year through lost earnings.  This can be the equivalent of £16,336.

To combat this, Demos recommends a Carer’s Account, functioning in a similar way to a pension, and paid into on an opt-out basis.  The Carer’s Account would be tax-free with contributions matched by the employer and could be transferred into the individual’s pension if they do not have children.

Report author Dan Leighton said: “Flexible working is the only option for Britain to address the social challenges of shared parenting and an ageing population that requires care. It will also be crucial to the success of the Government’s Big Society agenda.

“As it stands, parental leave is expensive for the employee, the employer and the state. A Carer’s Account would prepare parents and firms for children, allowing them to be better parents and better employees. More support for fathers also means more opportunities for mothers to return to work.”