Parental pay extension significant step towards security for all workers

The Government’s extension of statutory paternity pay to thousands of self-employed dads is an important step towards ensuring that, however someone works, they have the protections they deserve to live free from worry.

It was never right that self-employed fathers received zero statutory support when they had a child. Imagine how that would feel — having to choose between supporting your partner and caring for your newborn in those crucial first weeks and having enough money in your bank account. Through extending parental pay to more than 150,000 additional parents a year, including self-employed dads and partners, the Government has shown recognition for the hard work self-employed people do, respect for the contribution self-employed dads want to make at home, and it has listened to the diligent campaigning from organisations like The Dad Shift.

The insecurity self-employed people face

It is important that we understand how precarious life can be for lots of self-employed people. The full-time self-employed poverty rate is 22%, the same as for part-time employees, and nearly 3 times as high as that of full-time employees (8%).¹ Many do not have the financial buffer to withstand a shock to their income due to a lack of savings and low household incomes. Almost 2 in 5 self-employed workers (39%) live in families with either no savings, or savings of less than £1,500, and more than 4 in 10 low-paid self-employed workers (44%) live in low-income households.²

Yet, most of the mechanisms that protect other working people against unmanageable drops in earnings aren’t available to you if you’re self-employed. You get no sick pay, no Jobseekers Allowance, no pension auto-enrolment, less generous maternity pay, and — until now — no paternity pay at all. This means normal life events, like having a baby or experiencing an injury, can lead to deep financial shocks and feed a sense of worry and insecurity.

In this context, it is unsurprising that nearly half of self-employed people do not feel like the benefits of self-employment make up for the lack of support they receive from government.

For the Labour Party there is a particular challenge. Having been the most common vote choice for self-employed people in 2024, Labour is now seen as the least supportive of self-employed people. Analysis by More in Common finds the public think Labour is more likely to care about salaried public-sector workers. Extending paternity pay to self-employed dads is a clear signal the Government recognises and cares about the UK’s shopkeepers, construction workers and plumbers. It’s also good policy, that lays the ground for bigger changes in the future.

What should come next

Extending parental pay should be seen as a significant first step towards both improving parental protections for mothers and fathers in the round, and providing core protections, and economic security, for self-employed workers.

The Parental Leave and Pay Review is a golden opportunity to ensure mothers and fathers have enough time and support to look after their newborn, free from the worry that they won’t be able to get by. We know that 2 weeks off for fathers at £194 a week is not enough, and that our levels of maternity pay lag behind similar countries. The Parental Leave Review Group — led by the Fawcett Society and Movember — is pushing for further policy changes that include 6 weeks statutory paternity leave at 90% of average weekly earnings. Not only does this make moral sense, but it would also contribute £2.68 billion to economic growth.³

 The Government also needs to extend protections to self-employed workers to help prevent unmanageable drops in earnings. Public attitudes research, conducted by Opinium on behalf of Bright Blue, shows the driving concerns for self-employed people are shocks to income through lack of work or ill-health, and being able to save for retirement. The majority feel current income protection is insufficient in these areas; they want to see the Government play a role in supporting workers during periods of ill-health.

Pay for periods of ill-health is the top policy priority for self-employed people. JRF is exploring how to create an effective sick pay system for self-employed people, and how more self-employed workers could be supported to save for retirement — currently only 1 in 25 wholly self-employed workers are saving into a pension.

More broadly, the policy and political agenda in relation to work needs to recognise that millions of workers do not get the protections they deserve and need in the modern labour market. Core protections  — such as for illness, having a child, or retirement — should be for everyone, not just people on a salary, so that in whatever way someone works they are protected against unmanageable drops in earnings.

Whether someone is an employee or self-employed, or works with their head, hands or heart, they deserve the same fundamental security when life takes an unexpected turn. The announcement on paternity pay is a great first step, and the Government now has an opportunity to build on this progress. It needs to ensure that the protections people need to live with dignity and security are available to everyone, no matter how they work.