Imagine discovering that your retirement savings are thousands of pounds lighter, not because of poor investments, but due to a widespread, decades-old payroll error. This is the harsh reality for countless mothers, who are losing out on significant pension contributions because of miscalculations during maternity leave. But here’s where it gets even more alarming: these mistakes aren’t isolated incidents—they’re systemic, spanning industries and payroll systems, and they’re costing women dearly.
An investigation by Times Money has uncovered a troubling trend: many employers are reducing pension contributions for mothers during maternity leave, aligning them with their reduced wages, despite legal requirements to maintain contributions at their normal salary level. One woman found herself short by over £5,000 in her retirement savings, and experts warn that others could be missing out on tens of thousands. And this is the part most people miss: even small errors early in a woman’s career can balloon into massive losses by retirement, as the missing funds could have grown exponentially with investment returns.
So, what’s going wrong? The issue stems from a combination of human error and flawed payroll software. Katie Guild, founder of Nugget Savings, an online financial resource for new parents, has identified countless cases across industries where maternity pension contributions were miscalculated. In a survey of 379 women, a staggering 239 reported discrepancies. Guild highlights one woman who believes she’s owed £20,000. But here’s the controversial part: while the pension regulator is aware of the issue, it remains unresolved, leaving women vulnerable to financial shortfalls.
The problem disproportionately affects women in the private sector, particularly those on salary sacrifice schemes, where statutory maternity pay rules complicate contributions. In March 2025, Pensions Minister Torsten Bell admitted the Department for Work and Pensions lacks data on how many women have been impacted. This lack of transparency raises questions: Why isn’t more being done to address this systemic issue?
Nugget Savings is calling for government action, urging a campaign to encourage women who’ve taken maternity leave in the past decade to check their pension contributions. They also want HM Revenue & Customs to provide clearer guidance for employers. But is this enough? Shouldn’t employers and software providers be held more accountable for these errors?
Take Alice (not her real name), who discovered her pension was missing over £5,000 after her employer stopped contributions entirely during her year-long leave. Despite acknowledging the mistake, her employer hasn’t repaid her. Kelly, from London, lost £1,534 and was met with an HR attitude that suggested she should be grateful for anything. Sarah, Sarah, and Georgie all faced similar issues, highlighting how widespread and deeply frustrating this problem is.
Lily Megson-Harvey from My Pension Expert notes the issue’s prevalence, though exact numbers remain elusive. She argues that software companies should prioritize fair maternity pay calculations to tackle the gender pension gap. Mike Ambery from Standard Life adds that smaller private sector employers, less familiar with maternity rules, are often the worst offenders. But here’s a thought-provoking question: If these errors have been occurring for decades, why hasn’t there been a systemic fix?
The financial impact is staggering. AJ Bell calculates that a woman earning £30,000 could lose over £2,000 by retirement if her contributions are based on statutory pay instead of her full salary. Take three maternity leaves, and that figure nearly triples. For higher earners, the losses can approach £15,000. Is this fair? And more importantly, what can be done to prevent it?
Rachel Vahey from AJ Bell emphasizes the long-term consequences: even small errors early in a career can significantly reduce retirement income. Her advice? Speak up immediately if you suspect an error, and ensure any corrections include lost growth. Comparing pre- and post-maternity leave contributions is key, and if your employer doesn’t rectify the issue, the pension ombudsman is your next step.
But here’s the bigger question: How many women are silently suffering from this issue without even realizing it? And what will it take for employers, regulators, and software providers to finally prioritize fairness in maternity pension contributions? Share your thoughts in the comments—let’s spark a conversation that could drive real change.
