City scheme aims to close financial sector’s class pay gap

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A new membership body has been launched as part of efforts to bring people from less privileged backgrounds into senior roles across the City.

The group, which will be known as “Progress Together”, will offer workshops, resources and mentoring schemes to people who might otherwise struggle to reach top-tier positions in financial services.

It comes as a new survey found that employees whose parents did not have professional careers themselves were 30% less likely to reach a senior position in their firms compared with their colleagues.

About nine out of every 10 senior roles in the financial services sector are held by someone from a higher socioeconomic background, which it defines as having at least one parent in a professional career by the age of 14.

The disparity has led to a class pay gap in which people from lower socioeconomic backgrounds earn on average £17,500 less than their colleagues. That is the largest sector pay gap in the country, according to research by the Bridge Group.

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The membership body, which will focus on ensuring the progression and retention of less privileged staff, is the brainchild of a taskforce led by the City of London Corporation, which was commissioned by the Treasury and business department in 2020 to find ways to increase socioeconomic diversity in the financial sector.

Catherine McGuinness, former head of policy at the City of London Corporation and chair of the taskforce, said Progress Together would “help advance our vision of a sector where performance is valued over “fit” and “polish”.

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The new body is starting with 12 partners, which will help organise workshops and programmes for their own staff. They include firms such as PwC, Santander, Fidelity International and Aviva.

The City minister, John Glen, said the body would work with employers to help them understand the barriers to progress for staff, share best practice, identify emerging issues and push for necessary policy changes.

“Research tells us that the majority of senior roles in financial services are held by those from higher socioeconomic backgrounds,” Glen said. “Financial services organisations across the UK, of all sizes, can benefit from this new membership body, ensuring that the government’s levelling up agenda is carried out, delivering equal progress and opportunity for all.”

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