The Motherhood Penalty and Financial Wellbeing in Aotearoa: What the Research Tells Us — and What We Can Do About It
For many New Zealand women, becoming a mother is one of life's most meaningful transitions. It is also, statistically, one of the most expensive. The "motherhood penalty" — the measurable hit to earnings, career progression and long-term wealth that women experience after having children — is now widely recognised as the single largest driver of the gender pay gap. The World Economic Forum estimates it accounts for around 80% of the gap globally, and the picture in Aotearoa is no different.
A life-course problem, not a life-stage problem
In its June 2025 report Improving Women's Retirement Income, MartinJenkins (for Te Ara Ahunga Ora Retirement Commission) reframed the issue as a life-course problem. Decisions made in a woman's twenties about education, work, partnering, parenting and housing compound — silently and relentlessly — into the retirement gap. Men's KiwiSaver balances are now on average 25% higher than women's, widening from a 20% gap in 2022. The gender pay gap, which still sits around 8–9%, is only the visible tip.
The numbers behind the penalty
Stats NZ Integrated Data Infrastructure analysis quantifies the motherhood penalty as a 4.4% decrease in hourly earnings and a 32.5% decrease in hours worked, comparing pre- and post-parenthood outcomes. The average financial cost to a New Zealand woman is around $113,000 in lost retirement savings. Parenthood, the same analysis found, has no measurable effect on men's earnings or hours.
The worst-case scenarios are sharper still. NZIER modelling indicates that a 30-year-old woman leaving the workforce can lose $318,000 in KiwiSaver by age 65; moving from full-time to three days a week from age 30 costs around $58,000. KiwiSaver contribution rates also fall as the number of children rises — from 3.8% on average for women with no children to 3.3% for those with four or more.
In 2021, only 61.8% of sole mothers were in paid employment, compared with 82.9% of women without children. After separation, women's incomes fall by an average 29% in the first year while men's rise by 15% — yet 75% of separating couples don't even consider KiwiSaver when dividing relationship property. By retirement, the consequences arrive in full force: NZ Super is the only taxable income source for 79% of women aged 65+, and single retired women who rent privately are now the fastest-growing segment of older-age poverty in NZ and across the OECD.
Dr Amanda Sterling: rethinking the system, not the mother
Much of the New Zealand conversation has, until recently, framed the motherhood penalty as something women must individually "work around". Dr Amanda Sterling, a neuroscience-trained executive coach and University of Auckland Business School researcher, has reframed it as a systems problem. Her doctoral research — published as Rebirthing New Life to Leadership — examined the experiences of 48 New Zealand women with children under five, all in or on the path to leadership roles.
Sterling's central finding is that mainstream leadership norms simply do not accommodate the embodied realities of pregnancy, birth, breastfeeding and early caregiving. Motherhood remains the most significant "drop-off point" for women in leadership pipelines, yet it is the area where most organisations invest the least. From this, she developed three pathways for change that organisations can act on:
Recognise the lived experience of motherhood. Build pregnancy, postnatal recovery and caregiving into leadership policy rather than treating them as private inconveniences.
Reshape leadership norms. Train managers in human-centred leadership — including vulnerability, flexibility and connection — so mothers are not penalised for working differently.
Redesign pathways and structures. Audit promotion, pay and return-to-work processes for bias, and make flexibility a leadership-track norm, not a career limiter.
Practical actions that mitigate the financial risk
Alongside Sterling's organisational lens, the Retirement Commission report points to concrete personal and policy steps. Since mid-2024, the Government has contributed 3% to KiwiSaver during paid parental leave — but only if the parent also contributes, and the IRD's own analysis suggests just 15% of PPL recipients currently do. Opting in is one of the highest-return decisions a new mother can make. Sharing parental leave with a partner, as Unilever NZ has shown with its gender-neutral 16-week policy, evens contribution patterns. Negotiating flexibility, salary and progression milestones before leave begins protects re-entry. And — crucially — including KiwiSaver and pension assets in any relationship property conversation, ideally with legal advice, can prevent the silent transfer of retirement wealth from women to men at separation.
The motherhood penalty is not inevitable. As Sterling argues, and as the 2025 Retirement Commission research now quantifies in unmistakable detail, it persists because workplaces and retirement systems were designed without mothers in mind. Naming the cost — and redesigning around it — is how Aotearoa closes the gap.
What can women do?
Access our member only report with AWM Access for free on Building Wealth as a Woman in Aotearoa: A Practical, Real-Life Guide under our blog site -