You are here: Home - Household Bills - News -

Gender pay gap in the UK is getting worse

Written by:
As we celebrate International Women's Day, research reveals that the gender pay gap has become even more pronounced.

Hardly the way to celeberate International Women’s Day as a report from ‘big four’ accountancy firm PwC reveals that the UK had dropped from ninth to fourteenth on the firm’s annual index of women’s employment outcomes in OECD nations, as a result of the gender pay gap widening from 12% in 2020 to 14.4% in 2021.

That 2.4 percentage point growth was four times the typical increase seen across the OECD.

The PwC study found that the UK remains the leading economy among G7 nations for overall employment outcomes for women, though the gap from second place Canada has narrowed.

The role of rising childcare costs

Progress towards gender pay parity has reversed since the pandemic, with female labour force participation dropping by 0.4 percentage points between 2020 and 2021. PwC noted that this came at a time of labour market recovery across the OECD, with the firm suggesting that the women were being priced out of work altogether due to the rising costs of childcare.

Its research found that childcare costs in the UK, relative to average income, are among the highest in OECD countries. Net childcare costs here represent almost a third of average family incomes, compared with as little as 1% in Germany.

Childcare costs in the UK have grown substantially in recent years, with average nursery costs rising by more than 20% since 2015, according to PWC. This comes at a time when average weekly earnings have risen by only 14%.

Regional disparities

The PWC analysis found that Northern Ireland is the top performer when it comes to the gender pay gap, with a gap of only 5%, as well as the third highest full-time employment rate for female workers across the UK at 64%.

However, it has the lowest female labour force participation rate of any region in the UK at 70%.

The South West took second spot, with Scotland in third. 

Priced out of work

Larice Stielow, senior economist at PwC, pointed out that an 18-year-old woman entering the workforce today would not see pay equality during her working lifetime, noting that at the current rate it will take more than 50 years to reach gender pay parity.

She continued: “The motherhood penalty is now the most significant driver of the gender pay gap and, in the UK, women are being hit even harder by the rising cost of living and increasing cost of childcare.  

“With this and the gap in free childcare provision between ages one and three, more women are being priced out of work. For many, it is more affordable to leave work than remain in employment and pay for childcare, especially for families at lower income levels.”

Research earlier this month revealed that the gender pay gap tends to get worse after the age of 35, while two million women earn less than the real living wage

It’s not just the gender pay gap which is damaging women’s financial health; a study from TotallyMoney found that women on average have a 10 point lower credit score than men, a gap which lasts throughout their lifetime, which locks them out of more than 10 million mainstream financial products.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week