Mind the (pay) gap: Difference in pay for millennials is only five per cent in 20s but hikes significantly in 30s and 40s

Francesca Washtell
Follow Francesca
Polar Vortex Weather System Brings Artic Temperatures Across Wide Swath Of U.S.
Women have better pay equality than ever before in their 20s, but unfortunately it doesn't last (Source: Getty)

The gender pay gap has almost halved in a generation for millennials in their 20s, research out today shows, but the gulf is poised to escalate again once women reach their 30s and 40s.

Millennial women, born between 1981 and 2000, who are now in their 20s earn around five per cent less than their male peers, an analysis from the Resolution Foundation has found.

This is down nine per cent for women in the so-called "generation X", born between 1966 and 1980, and down from a 16 per cent pay gap for baby boomers born between 1946 and 1965.

Read more: Cherie Blair says there's "backlash" against women after Clinton loss

However, the Resolution Foundation has warned that "much of that progress looks set to be undone", from signs that the gender pay gap widens again when women get older and have children.

For generation X the pay gap increased from 10 per cent at age 30 to 25 per cent by the age of 40, while for millennials this rises "steeply" to nine per cent when they hit 30, suggesting "that the old challenges associated with having children endure for young women today", the foundation said.

Other studies have found as many as two-thirds of women go into lower-paid or lower-skilled jobs when returning from a career break or maternity leave.

Read more: New targets to have women in 33 per cent of top exec jobs by 2020 unveiled

"Young women today face relatively little disadvantage in terms of their pay packets compared to what their parents’ and grandparents’ generation faced," said Laura Gardiner, senior policy analyst at the Resolution Foundation.

"But while many millennial women haven’t experienced much of a pay gap yet, most probably will once they reach their 30s, when they start having children. What’s more this pay penalty is big and long-lasting, and remains for younger generations despite the progress in early careers."

Tackling the "long-last pay penalty" of having children should be a policy focus, the Resolution Foundation argued, particularly as men and women are both working for longer and could be employed into their 70s.

Read more: Here's how much less women in tech get paid compared with men

Alison Dodd, managing director at human resources and payroll provider Moorepay, said:

Today's news that the gender pay gap amongst millennials has been reduced to just five per cent is encouraging, yet, with the national average still at about 19 per cent, much more needs to be done to address inequality in the workplace.

Particularly women in their 30s and 40s are often getting the short end of the stick when it comes to their wages so UK businesses need to ensure they are putting equal, fair and transparent pay and benefit schemes in place in order to get rid of gender inequality.

Related articles