Gender pay gap falls to record low, ONS figures show

But campaigners warn Covid-19 and a second national lockdown in England could seriously derail progress

The gender pay gap fell to an all-time low of 7.4 per cent among full-time employees in April this year, down from 9 per cent in 2019, according to the Office for National Statistics (ONS).

The gap across all employees on all contract types fell to 15.5 per cent from 17.4 per cent in 2019, with this figure higher than that for full-time staff as a result of the number of women in part-time jobs with low hourly median pay.

The Gender pay gap in the UK: 2020 report, which looked at a snapshot of data from April this year, was based on a survey of 136,000 employees in the UK and is separate to annual gender gap reporting figures submitted by companies with 250 staff or more.

It stated that Covid-19 “did not have a notable impact on the gender pay gap in 2020” and that the shrinking gap reflected “underlying employment patterns”.

These narrowing gaps masked significant differences between different age groups, however. The report stated: “The gender pay gap remained close to zero for full-time employees aged under 40 years but was more than 10 per cent for older age groups.”

It also found that the pay gap was larger among higher earners compared to lower-paid employees.

Charles Cotton, senior reward and performance adviser at the CIPD, said organisations needed to pay special attention to age disparities. "While life may begin at 40, so too does this gender pay gap,” he said. “People professionals should be helping their employers examine their talent pipelines to see what’s stopping more women from progressing into senior roles. They should then be developing an action plan, which might, for instance, involve increasing opportunities for flexible working and learning opportunities."

Experts also cautioned that this apparently encouraging picture of a narrowing gap overall could be – despite the ONS report’s claim to the contrary – skewed by the Covid crisis.

"While on the face of it the fall in the gender pay gap is welcome, we are concerned that this data is likely to already be out of date as a result of the devastating impact of the coronavirus crisis – and that's before the impact of a second lockdown, which is likely to hit women employed in retail and hospitality especially hard,” warned Joe Levenson, director of communications and campaigns at Young Women's Trust.

“Young women on low pay were already struggling to get by before the coronavirus crisis hit and since then many suffered a loss of earnings because of redundancy or juggling precarious and insecure work with caring responsibilities.”

Sam Smethers, chief executive at the Fawcett Society, warned that a decision by the government to allow companies not to report gender pay gap data this year because of the pandemic also meant this positive picture might not be quite the whole story.

"While a fall in the gender pay gap is positive, we only have a partial picture because the impact of coronavirus means a quarter of employers are missing from the data set,” she said. “They are likely to be the ones hit hardest by the pandemic. Even on the figures we do have, we will need to wait until next year to know if there really has been a significant fall. The short-term impact of furlough also makes the figures less clear.”

The report came amid mounting pressure for more to be done to close the gender pay gap. The Equal Pay Information and Claims Bill 2020 brought before parliament last month called for women to have the right to know how much their male colleagues were paid, and for companies with at least 100 employees to report their gender and ethnicity pay gaps.

Levenson said the government needed to do more: “To target support where it's most needed, it's essential that the government does more to monitor the real-time impact on the labour market, including through requiring employers to report redundancy and job loss data by protected characteristics, better understanding of how low-income workers are being affected and ensuring gender pay gap reporting is reinstated for April 2021.”

A spokesperson for the Equality and Human Rights Commission said the government should force employers to publish action plans with specific targets and deadlines alongside their pay gap data. “This will help to address the additional pressures caused by the pandemic and contribute towards creating an environment where female employees can flourish. This in turn will demonstrate to employees, customers and shareholders a genuine commitment to equality and improving working practices,” they said.

Employers needed to “commit to meaningful action to address the barriers holding women back in the workplace”, they added.

As well as showing a mixed picture when the data was broken down by age and earnings, the ONS report also revealed a slow pace of progress. The gender pay gap had reduced by approximately a quarter among full-time employees and by just over one-fifth among all employees over the past decade, it found.

The report also noted that the gender pay gap “was higher in every English region than in each of Wales, Scotland and Northern Ireland”.

In London the gap had barely changed from 1997 – having reduced by just 1 per cent to 14.1 per cent.

Smethers reiterated the importance of keeping a close eye on gender pay gaps as England headed into a second national lockdown. “We know there are a number of risks to women’s pay and employment as a result of coronavirus, which could turn the clock back for a generation,” she said. “Mothers are more likely to have had their work disrupted because of unequal caring roles and a lack of childcare. Men are more likely to have worked under furlough, and to have had their pay topped up. 

“The second lockdown looks set to hit women working in hospitality and retail hard while predominantly male-dominated sectors like construction and manufacturing are still at work.”