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Time to close the gender pay gap

Posted in: Finance Last updated: 27 Aug 2014

Almost half a century has gone by since the women of Dagenham made their now famous stand for equal pay. We take it for granted these days that women are equal partners at work and in the home, but we know a pay gap still exists for many women. To compound this, women choosing to take time off to have children run the risk of increasing this gap. So what can be done?

Made in Dagenham

Back in 1968, women sewing machinists at the Ford plant in Dagenham took strike action for equal pay. Their historic victory – brought to life in the 2010 film Made in Dagenham – paved the way for the 1970 Equal Pay Act.

Since then we have also seen:

  • 1975 Sex Discrimination Act – promoted equality and opportunity between men and women.
  • 1975 Employment Protection Act – made it illegal to sack a woman due to pregnancy and introduced statutory maternity provision.

We know this law and the subsequent positive shift in attitudes across society has brought women equal rights with men in many areas of life. Working mothers no longer have to give up their careers to have a family and women now share the boardroom across the country.

The pay gap

But is this the full picture? Unfortunately we know it isn’t. The latest figures from the Office of National Statistics (ONS) show that the pay gap between men and women is now 19.7% – with women earning only 80p for every £1 men earn. [1]

The ONS figures also show men dominate the so-called ‘professional occupations’ – and women with children are less likely to work than those without. [2]

Where women lead

Of course, statistics only tell part of the story. We know that women are at least equal partners in the home and often take the lead on household finances and planning family budgets.

And we know that women in the workplace can rise to the very top – just look at Karen Brady; the Apprentice judge who is chief executive of Birmingham City football club and on the board of Topshop parent company Arcadia, or dotcom entrepreneur Martha Lane Fox.

Across Europe the UK leads the way with more women working in managerial roles than the EU average.

So why the gender differences in pay?

But whatever position women reach in the workplace lifetime earnings and pension savings are inevitably hit by biology – the desire for many women to take time off to have children. And it’s not just raising a family that can negatively affect a woman’s income – we all know when it comes to taking time off or reducing working hours to look after poorly family members of older relatives, it’s nearly always the female in most partnerships who carry the can.

Other factors impacting the pay divide include:

  • More women working in the public sector, where salaries are generally lower.
  • Traditionally masculine characteristics of confidence and forcefulness being given greater weight in promotions than typically female strengths such as people skills.
  • Women can sometimes be judged on appearance in ways that men are not.

And let’s not shy away from it, there are still employers – thankfully few and far between – who discriminate on pay and promotion prospects.

So what is being done about it?

According to shadow women’s minister Gloria De Piero, at the current rate of progress it will take more than 60 years for women to achieve true financial equality with men.

She is backing Grazia magazine’s campaign to close the gender pay gap.

What can you do now to address the issue for yourself and your family?

Low pay is duplicitous – not only does it impact the quality of your life right now, it has the ability to hamper your future plans. One of the main areas of concern for women is the effect of low pay or career breaks on pension savings. So If you’re on low pay and you don’t feel like things are going to change anytime soon, you may feel that you can’t afford a pension.

But remember, a little bit put to one side on a regular basis can soon add up – so don’t give up. Try to find a little in your monthly income to put into your pension pot. Just £40 a month into a pension fund, would immediately increase to £50 after tax relief from the Government – and could rise to £100 if your employer matches your contribution.

So whilst a lot has changed since the women of Dagenham fought for equal pay, there is still room for progress. Despite the fact that lower pay and career breaks may make an impact on your potential pension pot – this is not an excuse for not investing in one, and surely having some pension to fall back on is better than none at all.

Sources
1 Office for National Statistics (2013) “Annual Survey of Hours and Earnings UK, 2013″ [online]. Available from www.ons.gov.uk

2 Office for National Statistics (September, 2013) “Women in the labour market” [online]. Available from www.ons.gov.uk

Note: Whilst we take care to ensure Hub content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions. OneFamily do not provide advice so it may be worth speaking to an independent financial adviser about your own circumstances.