Gender pay gap will take 45 years to close

The gender pay gap in the UK will not close for 45 years as companies struggle to promote women into senior roles, a report by PwC has found.

The consulting firm's analysis of gender pay gap reports submitted to the Government's website showed that the mean gender pay gap decreased by 0.4% in the 2023-24 reporting cycle, from 12.2% to 11.8%.

Six in 10 organisations reported decreases in their pay gaps this year, but by less than 2%, PwC said. This was an increase from 53.7% of organisations reporting falls the previous year.

The median hourly pay gap also decreased marginally from 9.2% in 2022-23 to 9.1% in 2023-24.

The overall gender pay gap has only reduced by 1.6% since the requirement to report was introduced in 2017, which means gender pay parity will not happen for a 21-year-old woman entering the workforce today.

A fifth of organisations reported no change or a small increase (0-2%) in their gender pay gap in 2023-24, up from 17.6% in 2022-23.

PwC said this could be because companies' actions to improve gender representation can be a lagging indicator, taking years to impact figures positively.

The firm said the financial services sector struggled the most with closing gender pay differences, continuing to report the biggest pay gaps.

That said, it also reported some of the biggest narrowing of pay gaps compared to the previous year, alongside travel and technology.

The lowest mean gender pay gaps were in public administration, health, hospitality and leisure. Larger organisations with more than 20,000 staff also tended to have the lowest mean hourly pay gaps, it said.

Katy Bennett, diversity, inclusion and equity consulting director at PwC, said: "Whilst the gender pay gap continues to move in the right direction, the data once again highlights that organisations are facing difficulties in meaningfully reducing reporting figures.

"Societal barriers play a strong part but there are still things businesses can do to drive change and so it is critical for organisations to truly understand gender pay gap drivers and take targeted actions to address them."

She said many organisations were expanding their focus on pay fairness and transparency beyond just gender.

"It is now more important than ever for organisations to take a step back to fully understand the state of pay fairness and diversity within their workforce," she added.

"By truly understanding any barriers that exist within the workforce and embracing pay transparency, organisations can navigate the reporting landscape and use it as a way to shape their narrative, as opposed to letting it dictate it."

Companies with operations in Europe need to prepare for the EU pay transparency directive, which passed last year. EU member states have until June 2026 to introduce or update gender pay gap reporting regulations and other pay transparency rules to abide by the directive.