Parental Leave and Pay Under Review: What Employers Need to Know

The UK Government Launches a Major Review of Parental Leave and Pay

In a move that could reshape the way businesses support working families, the UK Government has announced a comprehensive review of the country’s parental leave and pay system. This initiative, launched in July 2025, aims to modernise existing policies, make entitlements more inclusive and help children get the best start in life.

The review is set to span 18 months and will take a close look at maternity leave, paternity leave, shared parental leave (SPL), adoption and bereavement leave, neonatal care leave and more.

Why Is This Happening Now?

The current system has long been criticised for being overly complex, financially inadequate for many families and out of step with modern working life. Key concerns include:

• Statutory paternity pay is just £187.18 per week (or 90% of average earnings, whichever is lower).
• Shared Parental Leave has a take-up rate of less than 2%.
• Many parents, particularly fathers, self-employed individuals and those in non-traditional family structures, struggle to access meaningful leave or pay.

This review offers a chance to address those issues and build a more flexible, inclusive and supportive system.

What Does This Mean for Employers?

For HR professionals and business owners, this is an important moment. While the review is still in its early stages, potential changes could include:

• Increased statutory pay levels.
• “Use-it-or-lose-it” leave entitlements for fathers and partners.
• Better support for self-employed parents.
• Streamlined or consolidated parental leave structures.
• Expanded eligibility and access across all sectors.

While these reforms would bring long-term benefits in terms of employee wellbeing and retention, they may also require significant updates to HR policies, contracts and internal processes.

What Happens Next?

The Government is currently conducting a Call for Evidence, seeking input from parents, employers, charities and experts. Findings will be analysed over the coming year, with final proposals expected in late 2026 or early 2027.

Altum HR will be actively monitoring developments and participating in industry discussions to ensure our clients are fully informed and prepared for any changes.

How Altum HR Can Support You

As always, we are here to help your business stay compliant, competitive and compassionate. Whether it’s reviewing your parental leave policies, updating your employee handbooks, or advising on flexible working arrangements, our team is ready to support you every step of the way.

Stay connected with us for further updates as the review progresses.

Need help preparing for potential changes? Contact Altum HR today to discuss how we can support your business.