IT’S Equal Pay Day – and the spotlight is on employers across the UK paying women less than their male counterparts.
The latest figures from the ONS show women are paid on average 8.3% less than men to do the same jobs – but there are ways to close the gap.
An analysis from the TUC suggests women effectively work for free for nearly two months of the year compared to the average man.
This is an increase on last year, when women were paid on average 7.7% less than men.
Women are also losing out when it comes to investments.
Research shows women are less likely to invest than men, which could put them at a financial disadvantage in the long term.
Findings from research group Kantar suggest the value of investments held by women aged between 21 and 53 is half that of men in the same age group.
Pressure is on firms to close the gap by paying women fairly and hiring more females in senior positions.
We spoke to money expert Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, for her top tips on closing the pay gap.
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How to ask for a pay rise
Women are both less likely to ask for a pay rise and less successful when they do ask, Susannah explains.
A recent YouGov survey found 46% of men have asked for a pay rise, compared to 33% of women.
The same survey found around a third of men were successful, compared to one in five women.
While asking for a pay rise can be daunting, Susannah says the key to success is to be prepared.
“The number one thing to do is get people in your corner,” Susannah suggested.
“Build a network, particularly among senior people, who can warm up your boss before you ask and make a case for how good you are.”
Susannah said it’s also important to understand the current job market.
“Research the market to find out what your skills can get you elsewhere, so you have a really firm idea of what you are asking for," Susannah said.
"If you have been approached by another firm with an offer, there’s no reason why you shouldn’t let your boss know that.”
“You can then put that offer on the table and say that you really value your current role and don’t want to leave, but explain what your skills can get you elsewhere.”
Susannah also recommended aiming high, so there’s room for negotiation on your new salary.
Applying for senior roles
Women tend to be more risk averse than men, which can impact the roles they apply for, Susannah said.
“Women can be put off from applying for more senior roles,” Susannah explained.
“Sometimes women will talk themselves out of applying for a role because they don’t tick every box on a job spec, but even if you don’t think you’re perfect you could still be the best candidate.
“Companies need to work on the language used on senior job ads to encourage more women to apply, but it’s always worth throwing your hat in the ring even if you feel you’re not completely qualified.”
Susannah also says women shouldn’t be put off if a job doesn’t appear to offer flexibility.
She said: “Even if the firm doesn’t advertise flexibility, if the manager likes you and wants you on their team, it might be something you can negotiate.”
Investigating your firm’s pay gap
Employers in the private or voluntary sectors with 250 or more employees must publish their gender pay gap data every year.
Some public sectors in England are also required to disclose their pay gap data.
If you work for a big firm, you can look online to get an idea of whether your company is paying you fairly.
And Susannah said employees at any company can push for transparency.
She said: “If you can get a network of people who are willing to share their salary you can find out if you’re being enough.
“Benchmark yourself against somebody doing the exact same job as you and include all elements of pay.
"Work out your pension contributions, overtime, find out what the absolute maximum you should’ve been paid is and ask for that. Never underestimate your value.”
Susannah also advises you to compare exact salaries, not pay grades – as these can vary greatly.
“You might be in the same pay grade as someone, but he could be in the middle of that range while you’re at the bottom,” Susannah said.
Taking action against unfair pay
If you discover you’re being paid less than a man doing the exact same job as you, your first action should be asking your boss to up your wage.
If you do this but your employer still won’t match your salary, you should speak to HR.
“If you are doing the exact same job and they’re being paid more, it’s against the law,” Susannah said.
“If they keep fobbing you off, you can seek legal advice and your employer will have to take you seriously.”
Susannah added: “Don’t be put off by the idea of taking action.
"Even if you want to leave the job, make sure you are being paid fairly first – and then you can move to a new role on the higher salary.”
Closing the investment gap
Women often face more financial obstacles than men do and the pay gap extends beyond just salaries.
“We’ve got gaps in pay, positions, pensions and investment – and that can have a long-term effect” Susannah explained.
“Thinking about long-term investment is important, but before you even consider investing make sure you have three to six months' worth of finances in an accessible savings account.
“When you have that immediate financial resilience, you should think about making savings and investments part of your monthly budget.
“You don’t need huge amounts to get started, you can begin by investing between £10 and £50 a month.”
Susannah said it’s essential to view investing as a long-term financial plan, which women may be more suited to as they’re often more risk averse when it comes to saving and investing.
She also said diversification is key, which means having a mixture of stocks, bonds and funds across different industries and locations.
“Investing is not without risk, but the more diversification you have lowers that risk significantly,” Susannah said.
Susannah recommends looking at Hargreaves Lansdown’s Financially Fearless blog, which was set up to empower female investors and give them knowledge and confidence to invest using simple, easy to understand language.
What about savings?
Susannah emphasises the importance of having access to at least three months' worth of savings before investing anything, especially during times of economic uncertainty.
But if you have enough saved to start thinking about investments, it’s best to put that money to work in stocks, shares, bonds and funds, which will deliver better returns in the long run.
“Savings rates have been ticking up, but not as fast as mortgage rates are rising and below the rate of inflation,” Susannah explained.
The risk of leaving money in instant access savings accounts at a time of high inflation is that your savings aren’t keeping pace with the inflation rate, leaving you worse off.
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“There is concern that markets are volatile, but instead of looking at the right time to get into investments it should be seen as a long-term investment you can drip feed money into month by month, which will help you ride out volatility,” Susannah explained.
“There is always risk, but over time investments have been shown to beat the returns you can get on instant access accounts.”
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