The average UK gender pay gap has seen the second largest decrease since the introduction of pay gap reporting in 2017.
The analysis by PricewaterhouseCoopers (PWC) uses data from the information provided by employers to the government’s gender pay gap service.
Its 2025 Gender pay gap report shows a decrease of 0.6 percentage points in the mean hourly pay gap, narrowing from 11.8% to 11.2%, and a decrease of 0.5 percentage points for the median hourly pay gap, from 9.1% to 8.6%. This compares to a decrease of 0.4 percentage points in 2024, and is one of the most significant year-on-year improvements to date, the largest being a 0.7 percentage point drop in 2022-23.
Employers in financial services and property have typically seen the largest reductions in their gender pay gaps, with real estate narrowing by 14.9 percentage points and banking by 8.6 percentage points, although these organisations have often had some of the widest pay gaps to begin with.
According to PWC, the data shows sustained efforts by organisations driving change, although even with this year’s large decrease, its analysis shows the longer-term overall pace of change remains slow, and it will take at least another 40 years for the pay gap to close completely.
This year saw more than 10,700 organisations submit their gender pay gap data, the highest number since reporting became mandatory for employers with 250 employees or more.
Sectors typically with a higher proportion of women working in them, such as hospitality, public administration and health, report the lowest pay gaps. These sectors also tend to rely on hourly wage structures rather than salaried roles, resulting in less variation in pay and smaller gaps.
In contrast, despite seeing the largest decreases in mean pay gaps compared to last year across the financial services sectors, they continue to report the biggest gender pay gaps. While continually showing progress in reducing their pay gaps, the large pay gaps are reflective of ongoing issues with gender equality within the sector.
PWC’s analysis also shows that the average mean hourly pay gap decreased for organisations of all sizes, with the largest decrease of 1.1% for organisations with between 5,000 to 19,999 employees. Each year, the largest employers with 20,000 employees and more have the lowest mean hourly pay gaps in contrast to the smallest organisations, which typically have higher levels of volatility in their pay gaps.
Andrew Curcio, global co-leader for reward and benefits at PWC, said: “The dial is finally shifting. Whilst we’re seeing incremental change, this year’s data shows that when employers take deliberate action over the long term, progress follows, although it will still take a long time for the pay gap to close. From reviewing pay structures, improving gender balance of senior roles, and transparent and inclusive promotion and recruitment processes, the organisations making the biggest strides are those embedding equity and consistency into their day-to-day decisions, not just their annual reports.”
“Employers are operating in a new world with increasing levels of compliance and regulation so it is more important than ever to sustain momentum, and shift the conversation from compliance to commitment. Employers are increasingly recognising that pay gap reporting is not just a regulatory requirement, it’s a strategic imperative tied to talent, reputation, engagement, productivity and performance.”
Sam Greenhalgh, partner in the employment team at law firm Birketts, added: “The latest data showing a narrowing gender pay gap is undoubtedly encouraging, especially where like-for-like comparisons can be made. It reflects a broader movement in the right direction, with many employers making genuine strides toward pay equity.
“However, it’s important to recognise that true like-for-like comparisons across all employers and sectors remain rare. Sectoral differences, societal norms, and domestic choices often shape the roles men and women occupy, as well as the time they spend in the workforce. These factors can significantly influence pay gap statistics. Employers must focus on the narrative behind their data, explaining the context and causes of any gap, to provide a more accurate picture of their pay policies.”
