The gender pay gap will narrow by 2024-25

Since the introduction of the pay gap reporting system in 2017, the average UK gender wage gap has decreased by the second-largest amount.

Financial services and real estate have seen the biggest reductions in gender pay gaps. Real estate has shrunk by 14.9 percentages points, and banking by 8-6pp. These organisations had often experienced some of the biggest pay gaps in the first place.

PwC’s analysis uses information from employers who have provided the gender pay gap service of the government with data. This is different from data collected by the Office for National Statistics which examines the amount paid to men and women across the entire economy.

PwC stated that the data showed sustained efforts from organisations to drive change. However, even with the large decrease this year, the analysis shows that the overall pace of the change is still slow. It will take another 40 years before the pay gap closes completely.

PwC’s 2025 Gender Pay Gap Report shows that the hourly mean pay gap has decreased by 0.6pp, going from 11.8% down to 11.2%. The median hourly wage gap also declined by 0.5pp, from 9.1% down to 8.6%.

This is compared to a drop of 0.4pp from 2024. The largest year-on-year improvement to date was a 0.7pp decline in 2022-23.

The number of organisations reporting their gender pay gaps has increased to over 10,000 this year, the highest since reporting was made mandatory for employers with 250 or more employees.

PwC says that policy changes such as the Equality (Race and Disability Bill which proposes to expand gender pay gap reporting into mandatory ethnicity and disabilities reporting in the UK along with additional pay gaps reporting and pay transparency requirements introduced across the EU are helping to shine a light on pay fairness.

Andrew Curcio is the global co-leader of reward and benefits for PwC. He said, “The dial has finally shifted.” While we are seeing gradual change, this year’s statistics show that employers who take deliberate actions over the long-term will see progress. However, it will take time to close the pay gap.

The organisations that are making the most progress, in terms of integrating equity and consistency, into their daily decisions and not just annual reports, are those who have reviewed their pay structures and improved gender balance for senior roles.

“Employers operate in a world of increasing compliance and regulation. It is therefore more important than ever that they maintain momentum and change the conversation from compliance towards commitment. Pay gap reporting has become a strategic imperative for employers, not just a legal requirement. It is also tied to employee engagement, productivity, and performance.

The lowest pay gaps are reported by sectors with higher percentages of women, like hospitality, public administration, and health. The pay gaps are smaller in sectors with a higher proportion of women, such as hospitality, public administration and health.

The financial services sector continues to have the highest gender pay gap despite the fact that they saw the greatest decreases in the mean pay gaps from last year. While the financial services sector has made progress in reducing its pay gap, the large gender pay gaps reflect the ongoing problems with gender equality.

PwC analysis shows that organisations of all sizes have seen a decrease in the average hourly wage gap. The largest drop was 1.1% among organisations with 5,000-19,999 employees.

The largest employers (those with 20,000 or more employees) typically have lower mean hourly wage gaps than the smaller organisations.

Sam Greenhalgh is a partner at Birketts, a law firm. He said, “The latest figures showing a shrinking gender gap are undoubtedly encouraging, especially when compared to like-for-like. This reflects an overall trend in the right directions, as many employers are making real strides towards pay equity.

It’s still important to note that it is rare for employers and industries to compare salaries in a similar way. Sectoral differences, social norms and domestic decisions often influence the roles that men and women fill, as well the length of time they spend working. These factors can have a significant impact on pay gap statistics.”

Greenhalgh said that the gender pay gap is often misunderstood to be an issue of equal pay. A pay gap doesn’t mean that men get paid more for doing the same job as women. It is more often the result of structural and cultural dynamics which require a deeper analysis.

He said that employers must explain the context and reasons for any pay gap in order to give a better picture of their policies.

Personnel Today and Employee Benefits Live hosted a webinar this morning to discuss ethnicity and disability pay gaps. They also shared the experiences of Birmingham City Council which voluntarily reports its ethnicity gap. View the webinar on demand here.

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