Sexism in the City will on Thursday come under renewed fire as a report reveals that women in financial services are paid a “shocking” 55 per cent less on average than men – almost double the gender pay gap for the economy as a whole.

The initial findings from the equality watchdog mark the first stage in an investigation that could see banks and other City institutions forced to change their employment practices. The report will also fuel a drive by Harriet Harman, Labour’s deputy leader, to include “tough measures” in the forthcoming equality bill.

Women account for about half of finance sector employees but are heavily concentrated in lower paid, lower skilled jobs, according to the report from the Equality and Human Rights Commission. The finance sector suffers disproportionately from the gender disparities that affect the wider economy, the report suggests.

Women lose out more in relative pay terms as they climb the career ladder. “Whilst men in finance increasingly gain as they move up the pay distribution compared with working elsewhere, women gradually lose their advantage,” the report states. Women are also largely cut out from the biggest bank bonuses, the report suggests, highlighting a 79 per cent gender pay gap for annual incentive pay for full-time workers in finance. The differences stem, at least in part, from men’s dominance of the top jobs. Barely one in 10 – 11 per cent – of senior managers in the finance sector are women, compared with a national average of 28 per cent. Pay levels are similarly polarised. While 70 per cent of men in the sector earned more than £29,400 in 2007-08, 70 per cent of women earned less than £29,500.

On another planet
Gender pay gap* (%)
Full-time
All industries28
Finance sector55
Financial intermediation54
Insurance and pensions41
Auxiliary activities60
Part-time
All industries72
Finance sector80
Financial intermediation80
Insurance and pensions72
Auxiliary activities79
* Difference between mean annual gross male and female pay divided by mean male pay
Source: EHRC

The pay gap is highest for women working in fund management, stockbroking, futures trading and other “auxiliary activities,” who earn on average 60 per cent less annual full-time gross salary than men. For the sector as a whole, the comparable pay gap for full-time workers is 55 per cent.

Trevor Phillips, the commission’s head, stressed the “complex” reasons for the “shocking” figures, saying employers were not actively trying to discriminate. The underlying factors include job segregation and the tendency – revealed in the report – for men to work longer hours. The extra unpaid overtime worked by men, compared with women, “may contribute towards career and pay progression,” the report states.

Unions last night responded to the findings by calling on the government to force big employers to disclose their gender pay gap. “This report shows that the City is failing miserably to shed its macho reputation and impenetrable glass ceiling,” said Brendan Barber, general secretary of the Trades Union Congress. “The secrecy that surrounds bankers’ pay and bonuses often results in female staff being short-changed.”

But Angela Knight, chief executive of the British Bankers’ Association, told the Financial Times that the gender gap reflected in many cases women’s own decisions about their jobs and hours of work.

“I’m sure that there are valid points about disparities in position and pay but the statistics do not tell the whole story,” Ms Knight said. “We as women do end up making choices about our families that are in themselves job limiting.”

She added that “I personally do not find the City as macho to work in as it’s often portrayed”.

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