The UK gender pay gap has fallen to its lowest level since 2017 as progress towards equal pay grows, according to figures from PWC.
The average (mean) hourly gap has narrowed from 11.8 percent to 11.2 percent over the past year, marking one of the largest annual decreases since mandatory reporting began in 2017.
However, while PWC’s data shows the pay gap is narrowing at the fastest pace of change in years, researchers emphasised that the overall pace of progress remains slow. At the current rate of change it will take at least 40 years to fully close the gender pay gap.
The consultancy’s 2025 Gender Pay Gap Report revealed a decrease of 0.6 percent in the mean hourly pay gap (narrowing from 11.8 percent to 11.2 percent) as well as a decrease of 0.5 percent for the median hourly pay gap, from 9.1 percent to 8.6 percent. This is a bigger decrease than recorded in 2024 when the gap narrowed 0.4 percent, making the 2025 figures “one of the most significant year-on-year improvements to date”, PWC said. The largest shift was when the gap narrowed 0.7 percent in 2022/23.
More than 10,700 organisations submitted pay gap data this year, which is the highest number since reporting rules were introduced for businesses with over 250 employees.
Policy developments such as the proposed Equality (Race and Disability) Bill, which could make ethnicity and disability pay gap reporting mandatory in the UK, and EU pay transparency laws have upped the regulatory pressure. Employers could face the challenge of complex new standards.
Andrew Curcio, global co-leader for reward & 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 Birketts LLP, said the latest data “is undoubtedly encouraging”, especially where like-for-like comparisons can be made.
He said: “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.
“Crucially, gender pay gaps are frequently misunderstood as equal pay issues. A pay gap does not necessarily mean that men are paid more than women for the same work. Instead, it often reflects structural and cultural dynamics that require deeper analysis. 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.
“As the government considers extending pay gap reporting to include disability and ethnicity under the Equality (Race and Disability) Bill, the technical and compliance challenges for employers will only grow. Many already struggle with the complexities of pay gap reporting. That’s why it’s more important than ever for organisations to prioritise accurate, transparent reporting and prepare for a more regulated future.”
