The financial implications of prolonged leave

What effects on our finances can a period of sustained absence produce and how can we mitigate any potential fallout?

Periods of prolonged leave - maternity, paternity, long-term illness, caring responsibilities - are among the most significant moments in a person’s working life. Most employers focus on policy and pay, and rightly so. But in practice, that’s only part of what people need. What employees really need during these periods is clarity.

Even where employer support is good, financial pressure remains real. About half of employees feel pushed to return to work earlier than planned because of money worries, according to Unison, and 47% say they simply can’t afford to take the leave available to them, according to charity Working Families.

It’s not hard to see why. During leave, people are typically managing:

A drop in income
Higher costs at home
Less structure around day-to-day spending
Uncertainty about what it all means for their longer-term finances

Why pay on its own doesn’t solve it

There’s been real progress. More employers are improving leave policies, offering enhanced pay and greater flexibility. But what we’re increasingly seeing is that the most forward-thinking organisations don’t stop there - they layer in coaching and guidance alongside the policy itself.

Because the gap isn’t just financial. It’s confidence. People don’t just want to know what they’re being paid. They want to understand what to do with it.

Where guidance makes the biggest difference

Across our programmes, a few themes come up consistently:

Day-to-day finances: People want simple answers: how long can I realistically afford to be off? What needs to change while my income is reduced? Am I going to be okay month to month? Without that clarity, financial worry becomes a constant background hum.
Long-term planning: Leave often means pension contributions slow or stop, savings take a back seat, and bigger goals get pushed out. Our research found that 58% of employees are worried about their quality of life in retirement, and 22% have reduced or stopped pension saving (Hymans Robertson Personal Wealth Retirement Survey, 2022). If anything, these periods increase the need for support - they don’t reduce it.
Major life decisions: Prolonged leave rarely happens in isolation. It tends to come alongside other changes - a new family, a house move, a shift in working pattern. People need space to think those decisions through properly, not just react to them.

Where financial coaching makes the difference

Information is useful, but on its own it doesn’t change behaviour - especially during emotionally charged periods.

Financial coaching gives people a confidential, one-to-one space to talk through their situation, set realistic goals, and work out what to do next. Importantly, it’s guidance-based. We’re not telling people what decisions to make - we’re helping them understand their options and feel confident making those decisions for themselves.

And it works. Among employees who engage with coaching, a significant proportion report feeling more confident and better able to manage their money, according to Personnel Today.

Why this matters for employers

Financial stress during leave doesn't stay at home. Our own research shows that two in three employees say money worries have affected their engagement or motivation at work, 38% report a negative impact on their productivity, and 37% have taken time off in the past 12 months as a result, according to Hymans Robertson Personal Wealth. That's not a peripheral issue - it's a direct business risk.

The flip side is equally clear. When people feel genuinely supported through difficult periods, it builds trust. And that shows up where it matters: retention, engagement, and overall wellbeing.

Putting it into practice

Leave is one of the few moments in someone’s working life when everything changes at once -income, routine, priorities, and often identity too. That’s exactly when financial support matters most.

Policies and pay are important, but they don’t give people confidence on their own. That comes from proper, practical guidance. And when it’s done well, the difference is real - for individuals and for the employers who support them.