Six weeks paternity allowance for self-employed and other dads could boost economy by £3 billion

Introducing a new six-week paternity allowance to support self employed and ‘worker’ fathers would generate a series of benefits worth nearly £3 billion per year to the UK, research has found. The proposal, published in a new Institute for Policy Research (IPR) policy brief, argues that providing paid leave for self-employed and worker fathers – including contractors or those in gig-economy roles – at the Statutory Paternity Pay rate (£187.18 per week) would deliver significant economic and wellbeing benefits for families and for UK society as a whole.

The analysis finds that introducing a Paternity Allowance could generate a net societal benefit of nearly £3 billion per year under the most likely take up scenario. This includes gains from improved parental wellbeing, increased labour market participation among mothers, and reduced rates of separation and divorce.

Under current UK rules, fathers must be employees who have worked continuously for 41 weeks and earn at least £125 per week to qualify for Statutory Paternity Pay. As a result, around 22 percent of new fathers, many of them self employed or in insecure work, receive no financial support when taking time off after the birth or adoption of a child.

Mothers in similar work situations, however, are eligible for Maternity Allowance, which pays up to 39 weeks of support.

Dr Joanna Clifton Sprigg, a Senior Lecturer in Bath’s Department of Economics, said: “The UK lags behind many comparable countries in supporting fathers’ early involvement in childcare. Extending a six week Paternity Allowance to self employed and ‘worker’ fathers would close a major gap in the current system and deliver clear social and economic value.”

An estimated 131,000 fathers would be eligible for the allowance each year. The researchers modelled three likely take up scenarios – Low (28 percent), Central (41 percent), and High (54 percent) – drawing on Maternity Allowance data and international evidence on paternity leave uptake.

Under the preferred Central scenario:

• Over 54,000 fathers would claim the allowance annually
• Households would see a net benefit worth £3.19 billion
• Government costs would total £60 million
• Business costs would total £160 million
• The net benefit to society would total £2.97 billion

Wellbeing improvements for both fathers and mothers account for the largest share of this benefit. Even excluding wellbeing effects – a conservative method often used in cost benefit analysis – the policy still yields a positive net benefit of £67.8 million per year.

The study highlights that when fathers take leave, mothers are more likely to remain attached to the labour market. Under the Central scenario, the researchers estimate:

• £61 million in increased employment from mothers who would otherwise have stopped working
• £54 million from increased working hours among mothers who remain in work

Drawing on evidence from international parental leave reforms, the analysis also suggests the policy could reduce family separation, producing a further £110 million in annual benefits.