The financial and insurance sectors reported an average gender pay gap of 23 per cent, with over 85 per cent of employers having a gap exceeding 10 per cent, according to research from Isio.

At the current rate of improvement, Isio research estimated that it would take another 40 years, until 2065, to close the gender pay gap in the UK.

Yet, the research found signs of progress, as women were paid an average of 12.5 per cent less per hour than men in 2023/2024, the lowest pay gap seen since mandatory reporting began for organisations with over 250 employees in 2017.

However, disparities remain, particularly in senior roles, as the proportion of men and women in the highest pay quartile remained unevenly split, with 59 per cent men compared to 41 per cent women.

Isio highlighted that to “accelerate change” employers and policymakers need to take more focused and urgent action.  

The research also revealed “significant” sectoral differences, as following the financial services and insurance sector, the sectors with the highest pay gaps include construction, information and communication, mining, and science, where over seven in 10 companies report hourly pay gaps greater than 10 per cent.

Meanwhile, less than a quarter of employers in sectors such as public administration and defence had a pay gap greater than 10 per cent.

Despite some progress, nearly a quarter (23 per cent) of organisations have made no improvements in closing their gender pay gap since the reporting requirements were introduced in 2017, indicating that progress has been uneven.

Isio argued that new regulations would require employers to publish action plans to close the gender pay gap, alongside additional reporting obligations on ethnicity and disability, increasing the pressure on employers to close their gender pay gap.

It added that employers need to ensure they are collecting and reporting accurate data, while also engaging employees in the process.

As a result of the research, Isio identified 10 key common errors and unexpected complexities including, not excluding employees who have left before the reporting date, incorrectly reporting earnings for part-time workers, and mistakes when reporting bonuses.

Isio reward and benefits partner, Mark Jones, said it was encouraging that the gender pay gap continued to fall, but said there is “still a long way to go”.

“Lots of sectors still have sizeable gaps and this is usually where women are underrepresented in senior roles,” he continued.

“While many businesses have introduced policies to accelerate change, this will take time to feed through in the data and reduce their Gender Pay Gaps.”

Jones argued that the introduction of mandatory reporting was a “positive” step and has set a “good example” for employers determined to take further action.

He stated that proactive employers are embedding diversity and inclusion into their core business strategies and have taken steps to close the gap by improving transparency and developing action plans that go beyond the current reporting requirements.

“Closing the gender pay gap requires leadership, commitment, and action,” he emphasised.

“Employers who take the necessary steps to address this will not only improve their pay equity but will also gain a competitive edge in attracting and retaining top talent.”

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