City of London Gender Pay Gap Remains Highest in the UK – Treasury Report

Women working in the City of London are paid less than in any other industry compared to their male counterparts, according to a report from a UK Treasury Committee, which found that the average gender pay gap in financial services is twice as big as elsewhere.

The Sexism in the City report found that progress in narrowing the average difference in pay between men and women across an organisation is taking place at “snail’s pace” at financial services firms. The findings were published on 8 March and included figures about the lack of progress in increasing the number of senior women.

The financial services sector recorded an average gender pay gap of 23.17% compared with an 11.7% average in other industries in 2022/2023, according to PWC figures. This is down just 1.7% over six years, since reporting on this measure started in 2017.

“There has been only a small reduction in the average gender pay gap in financial services, which remains the largest gender pay gap of any sector in the UK economy,” the report states. “Our calculation is that on this trajectory it will take another 70 years for the gender pay gap to close in financial services.”

Despite well-publicised initiatives around efforts to close the gap and increasing female representation in senior roles, large banking firms continue to be the worst performers in terms of the gender pay gap. HSBC and Barclays Bank reported some of the highest mean hourly pay gaps with 43.2% and 42.9% respectively.

The picture is even more abysmal when it comes to bonuses. Women working for Barclays Bank can expect to get a third of their male counterparts as a bonus, with the mean gap standing at 67.5% at the bank, the report finds, adding those at HSBC get slightly less than half with a 54.4% gap.

Progress around upping the proportion of women in senior leadership roles was also glacial: the average proportion of women holding senior management roles was 35% in 2022, up from 27% in 2016.

The report follows a 2018 report from the Committee that found women under-represented in senior roles and established the persistence of a significant gender pay gap. “Five years on, we launched our current inquiry into Sexism in the City to find out how much had changed. Disappointingly, the answer appears to be ‘not much’. Many of the barriers identified in 2018 remain stubbornly in place,” the authors say in the latest report.

In 2022, Stacey Macken, a former employee of BNP Paribas in London, was awarded over £2mn in compensation when she won her sex discrimination claim against the bank.

One of the findings is that many companies in the financial services sector treat diversity and inclusion as a tick box exercise rather than a priority, resulting in only incremental improvements in both the proportion of women in senior roles and the reduction in pay differences.

The prevalence of sexual harassment and bullying was “shocking,” according to the authors, who noted that financial services firms treat complaints around such issues “poorly.”

“We were particularly concerned to hear of the widespread misuse of non-disclosure agreements (NDAs), which have the effect of silencing the victim of harassment and forcing them out of an organisation, while protecting perpetrators and leaving them free to continue their careers and go on to abuse others,” the report states.

Financial services is one of the UK’s largest and most important industry, employing more than 2.5mn people and contributing more than £100 billion in tax to the country’s economy.