Mind the Gap: Why Financial Services Has the UK’s Worst Gender Pay Divide

The financial services sector is one of the most high-performing and lucrative industries in the UK. But when it comes to gender pay equality, it has one of the worst track records.

Official statistics show that women working full-time in finance earn, on average, 23% less than men. In some of the UK’s biggest financial institutions, the gender pay gap—especially in bonuses—is even higher.

The Gender Pay Divide in Banking

Banks sit at the heart of the UK’s financial sector, yet they also showcase some of the most shocking gender pay gaps. In 2023, the median hourly gender pay gap at leading banks, including Barclays, Goldman Sachs, HSBC, JPMorgan Chase, Lloyds, NatWest, and Standard Chartered, ranged from 18.6% to 48.3%. When it comes to bonuses, the gender gap widened further, from 18.4% to a staggering 59%.

Why does this happen? Financial services employers often point to the lack of women in senior positions as the reason for these pay gaps. But the reality is more complex.

Are Women Underrepresented in Finance?

Actually, no. Women make up 43% of the workforce in financial services—a higher proportion than the UK’s average across all sectors (39%). The issue isn’t a lack of qualified female talent. Instead, it’s the fact that women struggle to climb the career ladder as easily as their male counterparts.

So, what’s stopping women from reaching leadership roles and closing the pay gap?

The Invisible Barriers to Equal Pay

According to research, at least half of the gender pay gap cannot be explained by differences in education, experience, or working hours. PwC’s Women in Work 2024 report highlights how gender biases and structural inequalities play a major role.

Experts have identified three key barriers that prevent women from progressing in financial services:

1. The Sticky Floor – Women are more likely to be trapped in lower-paying roles with fewer promotion opportunities.

2. The Glass Ceiling – Even when women are qualified for leadership roles, they are overlooked in favour of men.

3. The Motherhood Penalty – Women who take time off for childcare often face wage reductions and slower career progression.

According to the OECD, around 40% of the gender pay gap is linked to the sticky floor (keeping women in low-paid roles), while the remaining 60% comes from the glass ceiling and motherhood penalty.

A Financial Sector That Fails Its Female Talent

The financial sector’s stubbornly high gender pay gap is a sign that women are not being promoted at the same rate as men. Despite their skills and contributions, they face biased decision-making and limited recognition in their careers.

With finance being one of the UK’s most influential industries—and a popular career choice for women—this inequality needs to change. Financial firms must actively address these barriers by:

• Increasing female representation in leadership

• Ensuring fair promotion and pay policies

• Recognizing and rewarding female talent equitably

Financial institutions must do more to identify and remove gender-based barriers that hold women back. Only by offering equal career opportunities can the industry achieve a fairer and more balanced workplace.

It’s time for the financial sector to take real action—because gender equality shouldn’t be a bonus, but the norm.

For a deeper dive into this issue and solutions for creating gender-balanced organisations, read the full report on Women Working Worldwide’s website.

Women Working Worldwide February 2025