A Quarter of UK Employees Feel Underpaid

The UK's median gender pay gap for full-time employees fell to 7.0% in April 2024, a decrease from 7.5% in the previous year. However, the gap remains wider for employees over 40. When considering all employees, including part-time workers, the gender pay gap was 13.1% in the same period. For young women aged 18-29, the gap in gross annual income is a significant 17%, which equates to them earning almost £4,000 less per year than their male counterparts. The cost of living crisis is a primary driver of employee dissatisfaction, with 89% of UK adults reporting an increase in their living costs. This has led to what some consider "real-terms pay cuts" where wage increases have not kept pace with inflation. Consequently, salary has become the top reason for employees to change jobs. In response to these pressures, 77% of small and medium-sized enterprises (SMEs) in the UK are planning to overhaul their employee benefits packages. The most desired traditional benefits are now overtime pay, extra holidays, and a 4-day work week. There is also a growing demand for benefits that support financial security and mental wellbeing, with many companies expanding mental health support and financial wellness programs. The legislative landscape is also shifting. The proposed Equality (Race and Disability) Bill will extend mandatory pay gap reporting to include ethnicity and disability for companies with 250 or more employees, mirroring the current requirements for gender pay. Furthermore, starting in 2027, these large employers will be required to publish action plans alongside their gender pay gap data, outlining the steps they are taking to address disparities.