The National Living Wage vs Statutory Maternity and Paternity Pay: Why the Gap Matters
As of April 2025, the National Living Wage (NLW) for those aged 21 and over will increase to £12.21 per hour. This means a full-time worker (based on 37.5 hours/week) would earn approximately £460 per week, or £1,993 per month before tax. In stark contrast, Statutory Maternity Pay (SMP) and Statutory Paternity Pay (SPP) will rise to £187.18 per week (£812 per month), despite mounting pressure for these rates to be brought in line with modern living costs.
The widening gap between statutory parental pay and the national living wage raises questions about how the UK government supports new parents, as well as perceives the value of their contribution to society, particularly during a cost-of-living crisis.
In this blog, we examine the figures, government positions, and why SMP/SPP do not align with the national living wage - and likely won't anytime soon.
National Living Wage: The 2025 Increase
The government has confirmed that from April 2025, the NLW for adults aged 21 and over will rise to £12.21 per hour (Gov.uk, 2024). This reflects efforts to ensure that working adults can meet basic living costs, and is part of a long-term plan to reduce in-work poverty.
Full-Time Worker Earnings:
£12.21/hour x 37.5 hours = £457.88/week
Monthly: £1983.14/month (before tax)
This increase acknowledges rising inflation and living costs, with the government stating it aims to provide "fair and sustainable earnings for all workers".
Statutory Pay: The Unmoving Benchmark
Despite the rise in NLW, SMP/SPP will only increase to £187.18 per week in April 2025. This will mean a breakdown of:
Statutory pay = £187.18/week (£812/month)
National Living Wage = £457.88/week (£1983/month)
This means statutory pay is just 41% of the national living wage, a gap that parents must bridge through savings, partner support, or government benefits.
Why Doesn’t SMP/SPP Align with the Living Wage?
1. Different Purpose and Justification
The government distinguishes wages from benefits, viewing SMP/SPP as social security-style payments rather than compensation for work performed. As such, they are not tied to the living wage, which is considered a standard for active employment. However, it has legislated the National Living Wage in order to provide protection for employees.
2. Affordability Concerns
Raising SMP/SPP to match the NLW would significantly increase public spending, as employers reclaim up to 103% of statutory pay from the government. Ministers argue that aligning pay would cost billions annually, straining the Treasury during periods of economic uncertainty.
3. Annual CPI-Linked Increases Only
Statutory pay is adjusted annually based on the Consumer Prices Index (CPI), rather than living wage calculations. This ensures modest annual increases, but critics say these rises do not reflect real-world costs like rent, energy, and childcare.
Campaigners' Response: A Call for Fairness
Campaigners argue that it is unfair and unsustainable for new parents to live on less than half the living wage.
Demands include:
Aligning SMP/SPP with at least the National Minimum Wage
A review of the 6-week 90% pay limit, which many find too short
Recognition of parental leave as work that supports society
Final Thoughts
As the National Living Wage rises, the gap between what workers earn and what parents receive while on leave grows ever wider. While the government maintains that SMP/SPP are benefits, not wages, many believe this stance ignores the financial hardship parents face, as well as the investment in the economy that is made when children are born and raised well.
Until statutory pay reflects real living costs, parents will continue to bear the brunt of outdated policy, relying on savings, debt, or partner support during a time that should be focused on bonding with their child, not financial survival.
Sources:
Gov.uk National Living Wage Announcement (2024)
Gov.uk Statutory Pay Rates
Office for National Statistics (2024)
Maternity Action, TUC, Pregnant Then Screwed Campaign Materials