National living wage to help women but won’t close gender pay gap

pay increase

The new national living wage will see 3.7 million receive a pay rise by 2020, in contrast to the 2.3 million male workers who will benefit from the scheme.

According to research from Resolution Foundation, this will see 29 per cent of women in the workplace receive a pay rise, with 18 per cent of men also receiving a raise.

The National Living Wage of £7.20 an hour comes into effect in April next year, but only workers over the age of 25 will receive an increase in pay.

Changes in pay will begin next month, with the national minimum wage rising to £6.70 an hour from £6.50 an hour.

Women will also benefit from the raise in the minus wage, as they are still the lowest paid. Women will receive smaller annual cash gains of £690 in 2020, and men will pocket £860, according to the Resolution Foundation.

Now, however, businesses could be told to publish how much more they pay men than women across different pay grades.

With the gender pay gap smaller than ever, David Cameron now wants companies to publish more detailed information about the pay gap.

Better corporate reporting on the gender pay gap will provide an insight into whether companies are making full use of the talent available to them. A significant gender pay gap may for example be a driver of high turnover or poor morale and thus be of concern to long-term investors. Closing the gender pay gap would undoubtedly be of benefit to investors and to society as a whole.

Joanne Segars, Chief Executive, NAPF, said: “We applaud the companies that have already chosen to be more transparent when reporting about the gender pay gap in their firm. Disappointingly, these companies are in the minority and many firms still fail to provide any meaningful data on this issue – and so fail to assure investors and customers alike that this topic is being taken seriously.

“Our considered view is that while we encourage the Government to introduce new requirements for companies to report on the gender pay gap, this should form part of a drive to improve the quality of corporate reporting on the wider issue of the workforce, or human capital. This will prevent the gender pay gap being seen out of context and bring much greater scrutiny to an area which is fundamental to the long-term success of UK companies.”