The Office for National Statistics (ONS) publishes annual updates on gender pay gap in the UK, where it summarises differences in pay between men and women, arranged by reference to age, region, occupation, and full or part time categorisation. It has recently released its latest statistics, which confirm that the pay gap has been declining consistently, albeit slowly, for the UK workforce, but the pay gap remains particularly problematic amongst older, highly skilled, and higher paid employees.
Key Findings
The key findings coming out of the latest ONS data are:
- Over the last decade, the gender pay gaps for all employees and full-time employees respectively have fallen by approximately a quarter, coming down to 13.1% and 7% respectively.
- The pay gap is wider for employees over the age of 40 than for employees under that age. While pay gaps have decreased for most age ranges, the gap has widened by 1% for people aged 50 to 59 years.
- The pay gap is widest for high earners working full-time, with the gap growing from 2.7% for employees in the tenth percentile to 15.5% for employees in the ninetieth percentile for wages.
- The pay gap is the highest for people working in skilled trades occupations, and lowest in care, leisure and service occupations.
- The pay gap for full-time employees is higher in all English regions compared to Wales, Scotland, and Northern Ireland. London and the South-East have the highest average weekly earnings and the highest pay gaps.
- There continues to be a trend for the proportion of women to decrease with age in occupations where pay traditionally increases with age. For instance, the proportion of women in professional services falls from 51% for the 22-29 age range to 42.6% for the 50-59 age range.
- The data also provides specific pay gaps for different groups of occupations, and we have summarised the statistics for some key groups here:
- Financial managers and directors: 28%
- Legal professionals: 19%
- Business and financial project management professionals: 13%
- Chief executives and senior officials: 13%
- Managers, directors, and senior officials: 10%
Please note that occupations could be added to several groups, so these percentages should be interpreted with caution.
Reflecting on progress and reforms
While a narrowing pay gap suggests that progress has been or is being made, the decline has been incremental. The Trade Union Congress’s analysis published earlier this year reveals that the gender pay gap is unlikely to close until 2044. As noted in the key findings above, the pay gap remains particularly problematic amongst older, highly skilled, and higher paid employees.
Improvements also appear to be unrelated to the mandatory gender pay gap reporting regime introduced in 2017 with the hope that transparency would encourage change. The ONS calculates the gender pay gap on the basis of its Annual Survey of Hours and Earnings (ASHE). This is different from gender pay gap data collected under the mandatory reporting regime. Whilst ASHE collects details of actual payments made from employer responses for only a 1% sample of employee jobs drawn from the HRMC’s Pay As You Earn records, the mandatory reporting regime only applies to employers with more than 250 employees.
Analysis of the reports from the mandatory gender pay gap reporting regime published for 2022-2023, which became due on 4 April 2024, shows that the median pay gap is still 9.1% relative to 9.4% when the regime was first introduced nearly seven years ago. Further, the Institute for Fiscal Studies noted in 2021 that improvements to the gender pay gap were largely attributable to a higher number of women being educated, and not to any regulatory reforms. As we noted in our blog earlier this year, it is clear that the pay gap reporting regime needs to be reformed to be more effective.
The Labour government has recently made a number of commitments in relation to pay gap reporting. The recently introduced Employment Rights Bill asks companies, who are required to publish pay gap reports, to also disclose the identity of service providers and publish an equality action plan setting out what steps they are taking to address the gender pay gap.
Labour’s proposed Equality (Race and Disability) Bill is also expected to bring in obligations for ethnicity and disability pay gap reporting. Insofar as these obligations are subject to the same issues as gender pay gap reporting, it will be interesting to see the extent to which they improve equality and inclusivity in workplaces. For more information on Labour’s reforms, please see our blog and the Employment Law Reforms Tracker.
These new obligations arise in a challenging environment for diversity, equity and inclusion for employers, as they are confronted with both increased regulatory scrutiny and pressure to achieve progress, as well a potential heightened risk of corporate DEI initiatives being challenged. For more commentary on the shifting perspectives on DEI, read our blog on positive action and take a look at our ongoing thought leadership campaign.
For further information, please contact:
Avani Agarwal, Linklaters
avani.agarwal@linklaters.com
