UK Gender Pay Gap Persists, Pressuring Lawmakers
A new forecast indicates the UK’s gender pay gap will persist for another 30 years at current rates. The finding has sparked calls for urgent legislative action, with momentum building in Parliament for new mandates similar to the EU's Pay Transparency Directive, which is already forcing companies to redesign reporting and salary disclosure processes.
- The median gender pay gap for all employees in the UK was 12.8% as of April 2025, a slight decrease from 13.1% in the previous year. At the current rate of progress, the gap is not expected to close until 2056. - Key drivers of the gap include the unequal division of childcare, the prevalence of women in part-time work which tends to be lower paid, and the underrepresentation of women in high-paying sectors like technology and engineering. The "motherhood penalty" is a significant factor, with the pay gap widening considerably for women aged 40 and over. - Under existing UK law, employers with 250 or more employees must annually report specific figures, including their mean and median gender pay gaps for hourly pay and bonuses, and the proportion of men and women in each pay quartile. This information must be published on the employer's website and a government portal. - A significant legislative change is coming via the Employment Rights Act, which will make it mandatory for large employers to publish action plans detailing the steps they will take to close their gender pay gap, starting from January 1, 2027. Currently, only about half of employers publish such plans voluntarily. - The EU's Pay Transparency Directive, which all member states must implement by June 7, 2026, goes further than current UK law. It mandates salary ranges in job ads, prohibits employers from asking about pay history, and requires companies with a gender pay gap over 5% to conduct a joint pay assessment with employee representatives. - The pay gap is particularly stark at senior levels. For example, research on FTSE 350 financial services firms found that female board directors are paid 66% less than their male counterparts, partly because only 9% of women on these boards hold higher-paid executive director roles. - The gender pay gap varies significantly by industry. The finance and insurance sector has the largest gap at 27.2%, meaning women in that industry effectively work for free for 99 days of the year compared to men. - Analysis of FTSE 350 companies that made the biggest reductions in their gender pay gap between 2019 and 2024 also showed significant revenue growth. For instance, Smiths Group PLC improved its median hourly pay gap by 25 percentage points while reporting a 23% increase in revenue.
