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The Actuary The magazine of the Institute & Faculty of Actuaries

Class pay gap found in the UK

Professionals from working class backgrounds are paid on average £6,800 less each year than those from more affluent backgrounds, according to a “ground-breaking” report from the Social Mobility Commission released today.

Britain remains a "deeply elitist society" ©iStock
Britain remains a "deeply elitist society" ©iStock

It reveals that even when professionals have the same education, role and experience, people from poorer backgrounds are still paid an average of £2,242 less than those from privileged ones.

This previously unrecognised pay gap is most prevalent in finance and medical professions, with those from working class backgrounds thought to be less likely to ask for pay rises, and to have limited access to work opportunities.

Commission chair, Alan Milburn, said: “This unprecedented research provides powerful new evidence that Britain remains a deeply elitist society.

“Too many people from working class backgrounds not only face barriers getting into the professions, but also barriers to getting on. It cannot be right that they face an annual class pay gap of £6,800.

“Many professional firms are doing excellent work to open their doors to people from all backgrounds, but this research suggests much more needs to be done to ensure that Britain is a place where everyone has an equal chance of success regardless of where they have come from.”

The research involved academics from the London School of Economics and University College London analysing data from the UK Labour Force Survey of 90,000 respondents.

They found that the UK’s traditional professions such as medicine, law, journalism and academia remain dominated by people from privileged backgrounds, with 73% of doctors from advantaged backgrounds and just 6% from working class ones.

In addition, the odds of someone from an advantaged background ending up in professional or managerial job are 2.5 times higher than they are for people with a poorer upbringing.

As well as having fewer opportunities and being less likely to ask for a pay rise, it is thought that there could be conscious or unconscious discrimination within the employment process, which may lead to ‘cultural matching’ in the workplace.

“How much you are paid should be determined by your ability not your background. Employers need to take action to end the shocking class earnings penalty,” Milburn added.

“The commission will be sending major employers details of this research and asking them how they intend to close the class pay gap.”