It will take nearly 30 more years to close the gender pay gap, according to TUC analysis, and savings firms are warning the pay gap is also affecting women’s financial futures.

However, according to the union, despite the introduction of gender pay gap reporting, there are still huge areas of deficiency, which means the average woman works for free for nearly two months every year. 

It estimates almost three decades before the gap is bridged, at the current rate of progression.

TUC General Secretary Frances O’Grady said: “It’s clear that just publishing gender pay gaps isn’t enough. Companies must be required to explain what steps they’ll take to close their gender pay gaps – and bosses who don’t comply with the law should be fined. 

Pay gaps affect womens’ pensions

The gender pay gap also impacts women’s pensions according to  Fidelity International. It found a possible gap of £142,603 between the sexes using modelling research. 

This, it says, is partly because women are less likely to put themselves forward for a pay rise. It found around a half (50%) of men have asked for a pay rise at some stage in their career, with a quarter (25%) making more than one request within their working lifetime. In contrast, just 37 percent of women have ever asked for a pay rise – with only 12 percent making subsequent requests.

Industrial gender pay gaps 

The TUC says that even in jobs that are dominated by female workers like HR, education and social care – the gender pay gap persists. 

Per hour, women in these sectors are paid less on average than men, both because they are more likely to be in part-time jobs or are in lower-paid roles.  

  • In education the gender pay gap is 25.4 per cent, so the average woman effectively works for free for more than a quarter of the year (93 days) and has to wait until Saturday 2 April 2022 before she starts getting paid compared to the average man. 
  • In health care and social work jobs, where the gender pay gap is 18.3 per cent, the average woman waits 67 days for her Women’s Pay Day on Monday 7 March 2022. 

The longest wait for Women’s Pay Day comes in finance and insurance. The gender pay gap (32.3 percent) is the equivalent of 118 days, meaning it’s nearly a third of the year before Women’s Pay Day finally kicks in on 27 April 2022. 

Generational gender pay gaps 

Older women have the widest gap, so they have to wait longer for their Women’s Pay Day. 

  • Women aged between 40 and 49 have a pay gap of 21.3 percent and work for free until Friday 18 March 2022. 
  • And women aged 50 and 59 have the highest gender pay gap (21.8 percent). They work 80 days of the year for free before they are paid on Sunday 20 March 2022. 

Regional gender pay gaps 

The analysis also shows that in some parts of the country gender pay gaps are even bigger, so their Women’s Pay Day is later in the year. 

  • The gender pay gap is largest in the south east (18.9 percent). Women in this region work 69 days for free and their pay day isn’t until Wednesday 9 March. 
  • Women in the south west (16.6 percent) had their pay day yesterday and women in the east midlands (16.8 per cent pay gap) have to wait until today (Wednesday 2 March) for their pay days. 

Regional variations in the gender pay gap are likely to be caused by differences in the types of jobs and industries that are most common in that part of the UK, says the TUC. 

Ms O’Grady says creating opportunities for flexible working would enable women to do their jobs around their other responsibilities and also close the gender pay gap. She said: “All jobs must be advertised with the possible flexible options clearly stated, and all workers must have the legal right to work flexibly from their first day in a job.” 

Women need to ask for a pay rise

Fidelity International’s research found that a man on an average salary of £37,817 (as recorded by the Office of National Statistics – ONS) who receives a pay rise every five years throughout his career, could see his salary grow to £75,748 by retirement age. In comparison, a woman’s salary starting on £25,066 would only grow to £49,683 if she received a pay rise of £1,284 every 5 years.

The impact of this pay rise gap becomes even starker for women’s pension savings, as over time, relatively small differences in contributions can make a significant difference. Fidelity’s model, based upon assumed workplace pension contributions of 8% of salary reveals that this disparity in pay rises could, over time, leave men with £142,603 more in their pension pots compared to women.

Childcare and parental leave 

Ms O’ Grady said the pay gap automatically worsens when women become mothers, which would ultimately leave less funds in their pensions. 

She said: “The gender pay gap widens dramatically once women become mums. We need more funding for affordable, good quality childcare to support working parents – along with better wages and recognition for childcare workers. 

Ms O’Grady also called on the government to allow fathers to have the same entitlements as mothers to prevent women having to take on the ‘lion’s share of responsibility’ when a couple has a baby.

“We need a complete overhaul of the shared parental leave system. It’s not an affordable option for most working families. Dads need leave they can take in their own right. It shouldn’t rely on mums giving up some of their maternity leave.” 

Maike Currie, investment director at Fidelity International, also called for women to get more support with their finances: “From our modelling it’s clear that even modest amounts can have a big impact over time. Women typically have longer life expectancies meaning their pension pots need to stretch further, but lower pay, smaller pay rises, and career breaks all combine to create a significant shortfall.”