The average pay difference between male and female non-executives on financial services boards in the UK is a hefty $100,000—or £73,000—according to new research.

EY, a professional services firm, says the UK financial services pay gap has closed from 40% to 29% since 2020, but still overshadows non-executive pay gaps in other major economies. The firms adds that the UK pay gap may be contributing to an overall decline in “overall non-executive pay”.

EY’s Martina Keane, financial services leader in the UK and Ireland, says it is “encouraging” to see the pay gap narrowing. “But this progress should not obscure the scale of the challenge that remains.”

She adds: “Concerted, proactive efforts are needed to sustain and build on the progress that’s been made, but the pace must pick up.

“Faster progress to gender pay equality in financial services will better ensure that the best global talent is attracted, retained and leveraged to promote industry and economic growth.”

While UK non-executives labour with a 29% pay gap, colleagues in the US operate with one of just 4% ($13,000), Canada 9%, ($22,000), Germany 21% ($57,000) and France 22% ($31,000).

The only country with a larger gender pay gap than the UK is Switzerland, where it is 55%—on average $478,0000—according to EY.

Across the banks

EY says it is the UK’s banking sector that accounts for the largest proportion of the pay gap, with an industry figure of 45%, which has risen from 34% in 2020. Insurance, wealth and asset management have seen their pay gaps decline.

There has been some suggestion of growing concern about UK non-executive pay compared with peers in other jurisdictions. In December, a report from Alvarez & Marsal said non-executive pay for directors in the FTSE 100 was down 10% in real terms over the past 10 years, and fails to compete with US pay levels.

Elsewhere, regulators have moved to clarify that non-executives can receive at least part of their pay in shares, provided companies preserve non-executive independence. The Financial Reporting Council issued the clarification after the government included the policy in its Regulation Action Plan.

EY believes the gender gap may explain the declining pay levels. “UK financial services firms have made strides to improve female representation in the boardroom, but an unintended consequence has emerged. As more women join finance boards in the UK, overall pay for non-executive directors is falling—even amid inflation—unlike the upward compensation trend seen in competitor markets.

“Financial services chairs should look to review representation and remuneration policies in tandem to ensure they are equitable and globally competitive.”