The gender pay gap was reported by the Office of National Statistics (ONS) to be 7% in 2024, but is this completely accurate?
Causes of the Gender Pay Gap
Now: Pensions found in a 2024 report that women are 60% more likely to carry out unpaid work and take on primary care roles than men, taking an average of 26 hours a week compared to 16 hours for men. This can lead to women having less time for paid work, and can be more likely to move to part-time employment
- Career breaks due to caring responsibilities meaning less opportunity for promotion
- An over-representation of women in lower paying sectors, such as care or education
- Under-representation of women in higher-earning positions
- The motherhood penalty – this encompasses some of the above factors. Find out more about the motherhood penalty by clicking on our blog link at the bottom of this page
Gender Pay Gap Underestimated in ONS Data
A study from UCL, Bayes Business School, the University of the West of England and the University of Stirling reviewed the ONS’s Annual Survey of Hours and Earnings (ASHE), which is what is used to calculate the gender pay gap in the UK. They discovered that the gender pay gap has been consistently underestimated over the last 20 years by a margin of around 1%. This is because smaller private sector firms were less likely to respond to ONS’s survey, whereas larger public sector employers, where the pay difference between men and women within jobs is generally smaller, were more likely to respond. This has led to a weighting of the figures based on which firms have actually responded.
This research found that despite responding being mandatory, only 63% of employers responded to the survey between 1997-2019, dropping to 46% since 2020. They discovered that the response rate from the largest firms was around 50% higher than the smallest firms. They also found that response from public sector employers was around 15% higher than private sector employers.
Given that the ONS reported the gender pay gap to be 7% in 2024 for full-time employees, this report suggests that the true figure could be closer to 8%.
This 1% underestimation is a “small but noteworthy” margin, particularly since the ASHE provides many of the UK’s official earning statistics and is used to help decide changes in pay for doctors and nurses and to help set the minimum wage.
“We welcome ONS’s recent accouncement that they will be conducting a wide-ranging review of methodology behind the Annual Survey of Hours and Earnings. As part of the review, we encourage them to look at how the data can be made more representative of jobs in all types of organisations, so that the issues we observed can be addressed.” – Lead Author, Professor John Forth
Fancy some further reading? Why not check out one of our other blogs:
What is the Motherhood Penalty? – where we discuss the impact of parenthood of parenthood on women’s careers
Gender Gap Pensions – where we delve in to the reason why, on average, men’s pensions are 33.5% higher than women’s
Under-representation of Women in Financial Services – where we discuss how only 18% of UK financial advisers are women, why this is, and how this is changing
Breaking the Stigma: Menopause at Work – we discuss how menopause can negatively impact working women and their earning potential, particularly due to the stigma surrounding talking about menopause and periods at work