The average woman working in the UK finance industry earns around 26% less than their male counterparts, a number that has fallen less than three percentage points after five years of UK companies reporting their gender pay gap.
That compares with an average wage gap across the whole UK workforce of 13%, based on the latest dataset.
Women working in UK financial services were paid less than men last year based on their mean hourly pay, according to a Bloomberg News analysis of filings submitted to the government as of 5 April. That means women earn just under 74 pence for every pound that men earn when comparing their average hourly pay.
Average difference in hourly pay between men and women for the companies that have reported as of
Women won’t reach gender parity at senior levels in financial services until 2037 at the current pace, according to the 2023 Women in Finance report.
The picture is particularly stark among the bankers, lawyers and accountants that work in the City of London.
HSBC Bank Plc, the entity representing the lender’s UK investment banking operations, reported the widest gap among the largest UK-listed banks at about 43%. Still, that’s an improvement of 7 percentage points on last year.
At Barclays Bank Plc the gap is just below 43%, while it is 38% at NatWest Markets Plc. At Goldman Sachs International and J.P. Morgan Securities Plc the pay gap is around 50%.
“Equal pay is the practice of paying men and women performing similar roles in a similar way — which is what we do at Goldman Sachs,” Richard Gnodde, CEO of Goldman Sachs International, said in a memorandum to employees published online. “What these numbers do reflect, however, is the underrepresentation of women at our most senior levels.”
The UK government introduced legislation in 2017, forcing companies with more than 250 employees to report their gender pay gap by 4 April each year. Data published this year reflect the difference in hourly pay between men and women on a specific date in 2022 and offer a blunt assessment across the whole workforce.
The figures don’t measure the pay of men and women doing the same job, or adjust for other factors, such as experience or location but show which gender holds the best-paying jobs.
Mandatory pay gap disclosure “is an effective way of getting companies to take action on gender,” said Tom Heys, a legal analyst at Lewis Silkin who advises clients on gender and ethnicity pay gap reporting. “It’s that structure of having to do it every year and having to say what you’re doing about it.
Yet progress has also been slow on getting more women in top positions. The share of female leaders across top financial firms increased just 2 percentage points to 35%, while some of Britain’s biggest financial services companies failed to meet their own targets for female representation in senior management this year, according to the latest Women in Finance Charter review.
“I’ve personally experienced a big change in corporate culture,” said Hanneke Smits, chief executive officer of BNY Mellon Investment Management and global chair of the 30% Club, adding that most companies now have diversity and inclusion policies in place. “That said, we know that post pandemic, the gender pay gap widened again. The challenge now is to not let the gap rise, wiping out the progress that’s been achieved.”
A sample of audit and consulting firms shows a 24% difference between male and female hourly wages as of April 2022.
The rise in pay disparities at PricewaterhouseCoopers LLP is due to a higher share of women joining the firm in junior-level positions — which are also in lower pay bands, the company said.
The gender pay gap reporting rules only require companies to include employee pay in their calculations. However, the City’s top law firms, referred to as the Magic Circle, voluntarily disclose the overall gap including partner pay.
Women working at these firms earn 60% less than men, according to the average pay gap that includes partners. When focusing on employees only, that number drops to 15%.
That’s due to a disparity between higher proportions of women joining junior legal, secretarial and business roles, while men dominate partner seats.
Law firms such as Linklaters are attempting to encourage more female participation by offering more targeted support to women, such as menopause policies. That company is on track to elect 40% new female partners each year since 2021, when the firm increased its internal target from 30% to encourage this movement.
Other professional services firms are also taking similar approaches. For example, half of all promotions at KPMG UK were female this year, and the company has set targets to achieve parity at every seniority level by 2030.
Similarly, Deloitte has set a target of 40% female partners by 2030.
Measures like linking executive pay to diversity and inclusion targets and equal paid parental leave to both parents are among the most effective for closing the pay gap, Smits said.
“On top of this, collecting and really scrutinising pay and promotion data across an organisation is vital,” she added. “You need to track your progress against targets.”
Updates story with names of units in seventh paragraph. An earlier version of the story corrected the first paragraph to clarify that women in UK finance earn 26% less than their male colleagues.