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Extending paternity leave could deliver nearly £13bn in annual social benefits, study finds

The policy, modelled on similar schemes in countries such as Spain, France and the Netherlands, would be a significant step toward gender equality and improved labour market outcomes for families.

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Extending paternity leave could deliver nearly £13bn in annual social benefits, study finds
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Reforming the UK’s parental leave system to offer fathers six weeks of paid, flexible leave could deliver annual net social benefits worth over £12.8bn, according to research from the Institute for Policy Research (IPR) at the University of Bath.

The policy, modelled on similar schemes in countries such as Spain, France and the Netherlands, would be a significant step toward gender equality and improved labour market outcomes for families.

The policy brief, Costs and benefits of improved leave for fathers in the first year: Too good to ignore, authored by Dr Joanna Clifton-Sprigg, Dr Alistair Hunt, Ms Lily Zelezetskii and Mr James Bailey, evaluated the economic and social implications of extending statutory paternity leave from two to six weeks.

The proposal focused on offering the leave at 90% of average weekly earnings (AWE), to be taken flexibly within a child’s first year.

Researchers argued that the current system of paternity leave in the UK is failing families.

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Uptake of Shared Parental Leave (SPL) remains low due to financial disincentives, restrictive eligibility criteria and administrative complexity.

While the number of SPL recipients rose from 6,200 in 2015/16 to 13,000 in 2021/22, this still represents only a fraction of eligible fathers.

The report proposed that better-paid, non-transferable paternal leave would encourage greater use and help rebalance unpaid caregiving responsibilities.

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Under the central scenario – assuming a 74% uptake of the six-week leave – the Government would incur a cost of £1.4bn annually, while businesses would bear £416m in short-term reorganisation and administrative expenses.

However, these are outweighed by the estimated £14.7bn in household benefits, which include increased female labour participation, higher household earnings and improved wellbeing.

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Even after excluding wellbeing benefits, the policy would still yield £529m in labour market gains.

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The report also considered three alternative pay configurations: one capped at £1,200 per week, one aligned with the National Living Wage, and one at the current Statutory Paternity Pay level of £187.18 per week.

While all scenarios produced positive net benefits, uptake and total returns dropped significantly under less generous pay structures.

For instance, the statutory-level policy was projected to deliver £2.7bn in net benefits annually, compared to £12.2bn under the capped high-pay scheme.

The authors stressed that flexibility and the option for sequential rather than simultaneous leave with the mother are crucial to maximising the policy’s labour market benefits.

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They also recommend maintaining SPL but overhauling it to remove barriers and ensure it complements a stronger paternity offer.

The authors concluded: “Six weeks of well-paid and flexible paternity leave would constitute a desired and important first step in delivering change.”

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