Mothers could be missing thousands of pounds from their pension because of widespread errors in maternity pay dating back decades.
Analysis by Times Money has found that some firms are reducing the amount they pay into mothers; pensions in line with their lower wages during maternity leave, despite the law saying that contributions should stay at their normal salary level.
One woman lost out on more than £5,000 from her retirement savings and experts said other losses could go into the tens of thousands. One savings expert said he had seen errors going back decades.
It is understood that pension contributions are being miscalculated due to human error and problems with payroll software. Even a small mistake early in a woman’s career can compound into a big one by the time she retires because the money she missed out on could have grown to tens of thousands of pounds with investment growth.
Katie Guild, who founded Nugget Savings, an online financial resource for new parents, said it had found scores of women across all industries whose maternity pension contributions had been wrongly calculated. In a survey of 379 women, 239 reported discrepancies with their pensions. Guild said one woman thought she was owed £20,000.
• Have you been affected by this issue? Email megan.harwood-baynes@thetimes.co.uk
“The gender pension gap is a systemic crisis, and it often begins the moment a woman starts her maternity leave,” she said. “It is deeply concerning that this issue isn’t confined to one industry. Mistakes are being made by employers who should know better, and the problem is exacerbated by payroll technology failing to apply the rules correctly.”
The issue disproportionately affects women in the private sector, while those on salary sacrifice could face even bigger losses. Pension contributions can not be made via salary sacrifice if you are on statutory maternity pay because government guidance says that it must be paid in full, so cannot be sacrificed. In this instance, employers should match the pre-maternity contributions from the employee as well.
In March 2025, the pensions minister Torsten Bell said the Department for Work and Pensions did not hold any data on how many women had been affected by this error.
• Johanna Noble: How to stop your darling children wrecking your finances
Nugget Savings wants the government to launch a campaign, urging all women who have taken maternity leave in the past ten years to check their pension contributions. The group also wants HM Revenue & Customs to issue clearer guidance for employers.
“We know the pension regulator is aware of the issue because it has spoken to payroll technology firms to try to address the error, but it’s clearly an ongoing issue,” Guild said.
‘I was missing more than £5,000’
The Times has spoken to many women, some of whom asked not to have their full details published because they are still working with the same employer, or because they have not been repaid the money owed.
Some said their pension contributions during maternity leave either stopped entirely or were based on their statutory maternity pay. Statutory pay is 90 per cent of your average weekly earnings for the first six weeks, and £187.18 or 90 per cent of your average weekly earnings (whichever is lower) for the next 33 weeks.
Alice (not her real name) realised her pension was missing more than £5,000 after her employer stopped paying into her scheme entirely during her year-long leave, which ended in December 2023. She was given 12 weeks of enhanced maternity pay (equivalent to 90 per cent of her full salary), followed by statutory pay. Her firm had stopped paying employer pension contributions as soon as she went on maternity leave.
“There was no issue with the company admitting it had got it wrong, but it still haven’t paid it back,” she said. Assuming 5 per cent annual growth, Alice, 34, who works in conveyancing and is from the Midlands, said she was missing an extra £600 in lost compound interest.
‘The attitude was I was lucky to get anything’
Kelly, 35, from London, found that she had lost out on £1,534 from her pension after returning from maternity leave in July 2023. “The attitude from HR was that we were lucky to get anything,” she said.
Her employer eventually agreed to repay the money, but because she has since left that job, it became complicated because it could no longer put money into her pension. “In the end, it just paid me the lump sum and I paid that into my new pension pot,” she said.
Sarah, 38, found she was short of two months of pension contributions (about £800) from her employer, a small business, during her maternity leave last year. She had a generous policy that paid her full salary for six months, but when this dropped down to statutory pay, so did her pension contributions.
“The person running payroll had to go in and manually change the payments to ensure I got the right amount,” she said.
Georgie, 36, a journalist and editor from Kent, was underpaid £707 during her 11-month maternity leave from September 2024. Her employer paid 3 per cent of her statutory maternity pay into her pension instead of 3 per cent of her normal salary. She realised in April last year after seeing information about the issue from Nugget online.
She said: “I was the first person in my company to take maternity leave, so there was a feeling with HR that we were figuring it out together. I didn’t know what I was supposed to be getting. You don’t know what you don’t know.”
She said it was hard for women to keep on top of their pension at a particularly exhausting time in their lives, she said. “It was the hardest 11 months of my life.”
Lily Megson-Harvey from the financial advice firm My Pension Expert said she was surprised by how widespread the issue was, although it is difficult to know the exact numbers affected because it appears across industries and payroll providers.
“That is part of the issue, and why women need to know what to look out for,” she said. “There is an argument that software companies should factor this into future developments as well — systemising fair maternity pay would be a massive step forward in helping to address the gender pension gap.”
Errors that go back decades
While public sector workers can be affected, the error appears most widely within the private sector, and those on defined contribution (DC) schemes, where money is saved into a pot, and the amount you get in retirement depends on how much is contributed and your level of investment growth.
“It could affect anyone who received statutory maternity pay,” said Mike Ambery from the savings firm Standard Life. But those working at smaller, private sector employers, where HR is less familiar with maternity rules, were most at risk, he said. He has seen this mistake being made for decades over the course of his advisory career.
• Children aren’t cheap… in fact it now costs £249,000 to raise one
While the number of women affected is likely to be reducing, due to software getting better at catching the error, some women may not realise that they missed out.
Compounding the error
Money lost through lower pension contributions can snowball into large sums. The wealth manager AJ Bell said that a woman earning £30,000, with a £50,000 pension pot, who took maternity leave at 30 could be more than £2,000 worse off by the time she retired if her employer based her pension contibutions on statutory pay instead of her real salary.
If she took maternity leave three times (at ages 30, 33 and 36), the same error would cost her just under £6,000 by the time she retired. A higher-earning woman on £75,000 a year could be almost £15,000 worse off by retirement.
The figures assume the minimum standard for maternity pay — six weeks of pay at 90 per cent and 33 weeks at the statutory minimum of £187.18 a week.
Rachel Vahey from AJ Bell said being paid the wrong amount early on in your career could “significantly dent potential pension incomes.
“Even missing out on a few hundred pounds could create a far bigger hole in retirement incomes later on,” she said.
“If you think your employer hasn’t paid the full pension contributions you’re entitled to, speak up as soon as you can. If it agrees to fix the issue, check that the amount covers not only the missing payments, but also any growth those contributions would have earned if invested.”
The best way to check is to compare your employer pension contributions before and during your maternity leave — they should the same. If your HR or payroll department fails to rectify any mistakes, you could take your case to the pension ombudsman.