Have you ever wondered why starting a family can sometimes feel like a financial setback? The answer often lies in something called the motherhood tax – it’s a hidden cost that could be affecting millions of women worldwide.
In this article, we’ll break down what the motherhood tax is, why it matters, and (if you’re starting a family) how you can plan ahead to minimise its impact.
What is the motherhood tax?
The motherhood tax isn’t an official tax – it’s a term used to describe the financial and career setbacks mothers can often face after having children.
Sometimes called ‘the motherhood penalty’, it describes the negative financial impact that having children can have on women over time.
According to research published in 2025 by the Office for National Statistics (ONS), mothers in the UK lose an average of £65,618 in earnings by the time their first born turns five.1
The ONS research found that monthly earnings for female mothers were reduced on average by 42%, or £1,051 per month, compared with earnings one year before giving birth.1
What does the motherhood tax look like?
In short, the motherhood tax isn’t just about money – it could influence long-term financial security and professional opportunities, too. Including:
- Reduced income: mothers often earn less due to career breaks or reduced hours (going part-time, for example), potentially missing promotions.
- Higher expenses: childcare, healthcare (including pregnancy and post-partum care), and everyday baby costs can add up quickly.
- Limited career growth: mothers typically take on more household and caregiving duties, reducing time for paid work. This can slow advancement and reduce lifetime earnings. And as discovered in our Second 50 report on addressing the gender pensions gap, this is likely to lead to less in savings accounts, like their pension, too.
How to plan ahead when starting a family
In episode two of the Money:Mindshift podcast, host Dr Tom Mathar, family therapist Ashley Quamme, and financial planner Martin Banerjee unpacked the concept of the motherhood tax, highlighting why parenthood can feel like an economic balancing act.
In the podcast, Ashley Quamme emphasised the emotional complexity of financial planning for families, while Martin Banerjee shared practical strategies for balancing budgets without sacrificing long-term goals.
Their thoughts? Both agreed that transparency and proactive planning are key to mitigating the motherhood tax. They encouraged parents to:
- Budget for childcare early
- Explore flexible working arrangements in advance
- Challenge assumptions about caregiving
The Money:Mindshift podcast
Tune into our podcast where author, financial wellbeing pro and host, Dr. Tom, chats with experts about shifting your financial perspective.
How to financially prepare for starting a family
To prepare for the motherhood tax, you could start by building a family budget that accounts for childcare, healthcare, and emergency savings. Negotiate flexible work arrangements, such as remote options or adjusted hours, to maintain income and career momentum.
Consider making the most of employer benefits like parental leave, and retirement contributions, like salary sacrifice into your pension, if it’s available to you.
Dr Tom's tips on planning ahead
Awareness and planning are your best tools for protecting your financial future.
Dr Tom, the Head of Money:Mindshift and host of the Money:Mindshift podcast shares his top tips for planning ahead: ‘Focus on the things that are in your control (and don’t give too much bandwidth to things that aren’t). Something in your control is how much time and space you give to discuss your financial hopes and fears.’
He added: ‘In a relationship, do protect time and space to regularly reflect on the steps you can take jointly to prevent potential negative short, mid- to long-term consequences of motherhood. When doing so, consider your personal emergency and transition funds, as well as your personal retirement plan.
‘If you’re a single parent, think about creating your own support system – whether that’s a trusted friend, family member, or even a “money buddy” who you can discuss these things with.’
- The impact of motherhood on monthly employee earnings and employment status, England - Office for National Statistics. Data source: ONS. October 2025.