Women in financial services are earning approximately 30 per cent less than their male counterparts, according to new research, effectively working 99 days of the year without pay. Data from eFinancialCareers' latest Compensation Report reveals that women in finance earned an average of £104,000 in 2025, compared to £135,000 for men in the UK. This disparity highlights a significant gap even at higher salary levels.
Beyond the Pay Gap
However, the pay gap is only one aspect of a much larger issue, as the consequences extend far beyond salaries. In a sector where bonuses often constitute a substantial portion of total compensation, disparities frequently run deeper than base wages initially suggest. The result is not merely lower monthly income, but a widening chasm in savings, pensions, and overall long-term financial security.
Why the Gap Is Bigger Than It Appears
The structure of remuneration in financial services is a key driver of this inequality. While salaries are relatively transparent, bonuses are often less visible and unevenly distributed. Jeannie Boyle, director and chartered financial planner at EQ Investors, highlights how these structures can exacerbate inequalities over time. She notes that remuneration in financial services frequently comes through bonus payments, and the decision-making process can be opaque and subjective. Women are more likely to work part-time and may be less visible than their male colleagues, potentially causing them to lose out. However, the secrecy surrounding these awards makes it nearly impossible to ascertain the full extent of the disparity.
This opacity matters because bonuses are not just short-term rewards; they often feed directly into long-term financial outcomes. Boyle explains that people frequently use bonuses to make tax-efficient pension contributions, boosting retirement funds. This option is a luxury unavailable to those who have not already achieved a good level of financial security.
The Role of Seniority and Progression
The pay gap is also closely tied to who attains the highest-paid roles. Charles Cotton, senior performance and reward adviser at the CIPD, notes that in sectors such as finance, gender pay gaps are often driven by the underrepresentation of women in senior and highest-paid positions. Where women are underrepresented at leadership levels, the higher salaries and larger bonuses attached to senior roles amplify the gap. Global data underscores this sharp drop-off: women hold 42 per cent of all jobs, but their representation falls significantly at senior levels. In financial services, women make up 49 per cent of entry-level roles but only 23 per cent in the C-suite.
Progress has also stalled. Women's advancement into leadership roles had been improving for several years but began declining in 2022 and continued to fall in 2023, according to the World Economic Forum. Cotton emphasizes that employers need to look beyond headline pay figures and examine progression into senior roles and how reward decisions are made.
Why Disparities Persist
Despite years of focus on pay transparency, the gap remains stubborn, partly due to how work and careers are structured. Cotton explains that pay disparities often persist because women are still more likely to carry caring responsibilities, which can affect working patterns and career progression. Where workplaces reward long hours or constant availability, pay gaps can widen. Pay transparency matters, but it works best alongside fair promotion processes, flexible working, support for carers, and regular reviews of pay and reward decisions. These structural issues mean that the gap is not just about unequal pay for equal work, but about unequal access to the highest-paying opportunities.
What It Means for Your Finances
For individuals, the impact is cumulative and often underestimated. Boyle states that a 25 per cent pay gap in real terms could mean the difference between paying bills every month and being able to invest in the future. Lower pay and smaller bonuses reduce the ability to save, invest, and build financial resilience. Over time, this translates into a wider wealth gap. Boyle notes that investing just £100 a month over 40 years could build a pension pot of around £300,000, and the gap could ultimately determine when someone is able to retire. Cotton adds that within the financial sector, the gender pay gap will have lasting effects on women's financial security, with lower earnings, smaller bonus payments, and time out of the workforce reducing pension contributions and wealth-building opportunities, leaving many women with lower retirement incomes and less financial resilience.
A Wider Economic Impact
The consequences go beyond individual finances, as lower earnings for women affect spending power, economic growth, and productivity. Boyle points out that outside financial services, there is a wider impact on society and the economy because women have less money to spend. The World Economic Forum estimates that closing the global gender pay gap could increase global GDP by $12 trillion (approximately £8.9 trillion), underscoring the scale of the issue. However, for many women, the impact remains personal and immediate. Boyle emphasizes that finances play a huge part in every big life decision, from the home we buy to the number of children we have and the timing of our retirement. When women have less money than men, their choices are curtailed, going beyond simple financial security. Until these gaps are addressed in pay, progression, and bonuses, many women will continue to earn less, save less, and ultimately retire with less.
When investing, your capital is at risk and you may get back less than invested. Past performance does not guarantee future results.
