If you’re a woman in the UK, you’ll pretty much be working for free from now until Christmas.
Equal Pay Day – a campaign by The Fawcett Society – signifies the day in the year that women effectively stop getting paid, compared to their male counterparts. This year it lands on Wednesday, November 22.
The latest research shows that the situation has improved, but only negligibly. The Fawcett Society found that the mean, hourly gender pay gap between men and women’s earnings is now 10.7 per cent – a tiny decrease from 10.9 per cent last year.
Jemima Olchawski, Chief Executive of the Fawcett Society, said: “Today’s data means that Equal Pay Day falls on November 22 – this is the date when, based on average earnings, women start working for free until the end of the year. This is just 48 hours later than last year and represents a glacial shift in the Gender Pay Gap of just 0.2 percentage points.
“Fawcett runs the Equal Pay Day campaign on behalf of women across the country – but we shouldn’t have to. The UK’s gender pay gap has hardly moved on in recent years and this isn’t good enough.”
Worst offending industries
Separate research from the BBC has found that the banking and finance industry remains one of the worst offenders, with women earning, on average, 22.1 per cent less than their male colleagues. But it’s not alone. The gender pay gap persists across many sectors, including education, where it has increased this year by 0.8 per cent.
Large businesses that have some of the widest gaps in pay between men and women, according to the study, include EasyJet, Lloyds Bank division and Savills. At EasyJet, despite an improvement from last year, the average woman takes home just 53p for every £1 earned by men.
Sarah Coles, head of personal finance at Hargreaves Lansdown, says the gender pay gap starts to widen when women hit their 40s.
She said: “There’s very little difference when we’re younger – in fact on average women aged 18-21 earn more than men of the same age. It’s not at the typical age of childbirth that the gap starts to open either, it’s later in our 40s, when the burden of caring responsibilities is still overwhelmingly shouldered by women.
“In some cases, this is because women are more likely to make career compromises to accommodate parenthood – including working part time, taking a job that’s closer to home or actually working from home. Meanwhile, some drop out of the workplace for a period. Others take a step back, expecting to return to work when the children are older, and find themselves in the frame for looking after elderly parents.”
Lower earnings causes short-term problems, so women are less likely to have savings to fall back on in an emergency, and run the risk of being forced to borrow or miss bills. Then there are long-term issues, like the enormous gender pensions gap, that means huge numbers of women will either spend retirement struggling – or reliant on a partner. A recent government report revealed that women have a THIRD LESS than men saved into a pension at age 55.
Women are also less likely to invest, which we know makes a major difference to their future financial resilience, and seriously hampers any chance to close the gap.
So what can you do?
The problems are clear: the solutions are less so. We could say the pay gap is a fact of life, so women need to work harder to save and invest while they’re younger, to get a head start before the pay gap opens up. But this is vastly unfair. Why should women in their 20s be a slave to their pension while their male counterparts are out enjoying life?
The full answer requires a societal shift, but in the interim we need to take care of our needs. Here are three tips from Hargreaves Lansdown:
- Plan as a household, so one of you doesn’t end up with all the childcare costs while the other has all the savings.
- Consider both of your pensions, even if there are periods when one of you isn’t working. The working partner can pay up to £2,880 a year into the pension of the non-earner, which will be topped up with tax relief to £3,600, even if they don’t pay tax
- Make sure child benefit is paid into the account of the non-working partner, and that you’re claiming – even if one of you earns more than £50,000 and has to pay at least some of it back. That way the non-earning partner will get NI credits that count towards their state pension. If one of you makes more than £60,000 it will all need to be paid back., but you can apply for the benefit and elect not to take the payments.”