Report finds gender pay gaps in the finance sector go up to 60%

Renewed calls for pay transparency have followed a new Equality and Human Rights Commission report that has revealed significant gender pay gaps in the finance sector, some as high as 60 percent.

The main findings of the report, by the National Institute of Economic and Social Research, include

  • Women and men each form around half of all employees in the sector, which is roughly similar to the economy as a whole.
  • Only 28 percent of those working in professional occupations in the sector are women, compared to 42 percent in the economy as a whole.
  • Only 11 percent of senior managers in the sector are women, compared to 28 percent in the economy as a whole.
  • The overall gender pay gap for women and men working full-time in the sector is 55 percent for annual gross pay – approximately double the 28 percent figure for the economy as a whole. The gender pay gap for full-time, hourly pay (excluding overtime) is 40 percent, compared with 17 percent for the economy as a whole.
  • Comparing three sub-sectors, the highest gender pay gap for annual gross pay for full-time workers is in the 'Auxiliary Activities' area of the sector (which includes fund management, stock broking and futures trading) at 60 percent, while the lowest is in the insurance and pensions area with 41 percent. Auxiliary activities have the highest gender pay gap for hourly pay for full-timers excluding overtime, at 42 percent, with insurance and pensions the lowest at 36 percent.
  • The gender pay gap for mean annual incentive pay for full-time employees is 79 percent.

Findings also show that amongst the highest earners, the gender pay gap for full time hourly gross earnings is 45 percent, while women working full-time in the lowest paid roles in the sector receive on average 16 percent less in hourly gross pay than their male colleagues.

Women working full time in areas including fund management, stock broking and futures trading (within the subsector termed 'auxiliary activities') suffer the largest pay gap in the financial services sector, earning on average 60 percent less annual gross salary than men - a pay gap more than twice the national average. 

In the financial services sector as a whole, female full-time employees receive 55 percent less annual gross pay and 39 percent less hourly gross pay than men. These pay gaps are also approximately double the pay gap figures for the economy as a whole. 70 percent of men in the sector earned more than £29,400 in 2007/8, while 70 percent of women earned less than £29,500.

The report also points to a 79 percent gender pay gap for annual incentive pay (which includes bonuses) for full-time workers in finance.
The gaps in incentive pay and the pay gaps more generally point to the extent to which women hold lower status, lower pay jobs in finance - even though there are equal numbers of men and women in the sector as a whole. Only 28 per cent of those working in professional occupations and 11 per cent of senior managers are women.

The report is being published as the first stage of the Commission's Inquiry into pay rates in the finance sector.

Trevor Phillips, Chair of the Commission commented:

'The figures we’re releasing today are shocking and indicate just how serious the pay gap has become in the financial sector, with women concentrated in lower paid, lower skilled roles and few able to make it to the top. The truth is that however you look at the numbers, women do not have equal status or equal rewards. Nobody wants this kind of unfairness, including the businesses themselves. We are losing or not taking advantage of talented women from a crucial industry – something we can ill afford in these troubled times.

'In an economic recession, some may be tempted to take their foot off the gas when it comes to tackling inequality, asking if we can afford it. But the truth is, at a time when the City's reputation is under attack, a renewed commitment to fairness and tackling the decades old inequality faced by women, particularly in this sector, should be at the heart of efforts to restore business reputation.

'The reasons for the differences between men and women in the sector are complicated and include factors like job segregation as well as differences in average working hours. Our Inquiry will get behind these figures and investigate what measures can be taken to address the obstacles faced by women in finance.

'We are also calling on the Government to take significant steps towards addressing gender pay gaps in the upcoming Equality Bill. The Government has already said it will increase transparency by banning ‘gagging’ clauses, which prevent people discussing their pay, but we also want the Government to ask larger companies to have a much more transparent approach to the pay gap.'

TUC General Secretary Brendan Barber added:

'This report shows that the city is failing miserably to shed its macho reputation and impenetrable glass ceiling.The secrecy that surrounds bankers' pay and bonuses often results in female staff being short-changed.This culture can be tackled by forcing companies to be transparent about how they pay their employees and opening up family-friendly career paths.'


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