By Jabeer Butt OBE, Chief Executive, Race Equality Foundation
Like gender pay gap reporting, it does not assess equal pay for equal work, but instead reveals broader patterns in representation, progression, and reward. The introduction of gender pay gap reporting in the UK has led to greater transparency and action in many sectors. EPG reporting builds on this progress by extending the principle of pay transparency to race and ethnicity - helping to uncover structural inequalities, drive more inclusive employment practices, and potentially helping close the ethnicity pension savings gap too.
The need for more targeted action
In preparing our response to the Government consultation on the mandatory reporting of EPG, we looked at existing practice and noted that that while some of the UK’s largest private employers have taken steps toward greater transparency, progress remains uneven.
Our findings provide compelling evidence that the government’s proposals to make EPG reporting mandatory must go further than covering only the largest firms. Specifically, we argue that mid-sized employers—those with 50 to 249 staff—must be brought within the scope of the new regime. We reviewed EPG reporting across ten of the UK’s largest private sector employers. Most - including Tesco, HSBC and Royal Mail - do publish some form of ethnicity pay data. However, the quality and granularity of this reporting vary greatly. Only four of these companies offer any disaggregated data (e.g. breaking down outcomes by specific ethnic groups), and none include staff from Gypsy, Roma or Traveller (GRT) backgrounds. Most rely on headline median and mean figures or binary comparisons between “ethnic minority” and “white” employees - an approach that is of value but also risks obscuring significant disparities between groups.
The importance of intersectionality
Crucially, very few employers provide any form of intersectional analysis, despite clear evidence that outcomes vary significantly at the intersection of race and gender. Research shows that Black and racially minoritised women experience some of the most persistent pay penalties, even in sectors where they are well represented. Without data that shows how ethnicity interacts with gender - and other characteristics such as disability or job role - organisations cannot understand the full extent of workplace inequality or design effective responses. Mandating intersectional reporting would help correct this blind spot and support more meaningful action planning.
Compulsion is key
In our view, the current voluntary approach has clearly reached its limits. Where reporting is optional, it remains patchy, inconsistent, and lacking in both context and follow-up. Moreover, even among those who do report, few set clear targets or publish concrete actions in response to their findings. This is why the inclusion of mid-sized employers is so critical. These organisations—defined as those with 50 to 249 employees—collectively account for more than
4.1 million jobs across the private sector. They are particularly dominant in local and regional economies and in sectors where racially minoritised workers are often overrepresented. Many already have structured HR and payroll systems in place, and evidence from the Chartered Institute of Personnel and Development (CIPD) shows that a majority are already collecting some form of ethnicity data. What is often missing is the external requirement and support to report it transparently and act on the insights.
We recommend that the government adopt a phased implementation approach to mandatory reporting. In year one, the requirement should apply to employers with over 250 staff. In year two, this should be extended to organisations with 100 or more employees. By year three, the threshold should include all employers with 50 or more staff. Alongside this, accessible guidance, sector-specific examples, and technical support should be provided to ensure organisations of all sizes can comply meaningfully.
Without the inclusion of mid-sized firms, the proposed legislation risks leaving millions of workers outside the reach of transparency and accountability. It will also reinforce the misconception that only large companies bear responsibility for pay equity – and in turn pension equity. In reality, all employers have a role to play in dismantling structural inequalities. Ethnicity pay gap reporting can be a powerful lever for change but only if it is bold in scope, intersectional in focus, and inclusive of the employers that shape the everyday realities of the UK workforce.
Ethnicity and gender – strengths not barriers
By Shayala McRae, LCP and SPP member
Early beginnings
Born in 1967 near Earl’s Court to Sri Lankan parents who met at university in London, I lived here till I was five, then went to school in Colombo before returning to England to read Mathematics and Management Sciences at Kings College London in 1987 - it never once occurred to me that STEM subjects might not be for girls!
My earliest experience of ethnic divergence was probably retraining myself to speak in English (aged 2) as none of the children I rushed over to talk to in London parks understood my chatter in Sinhala - the language I had been taught to speak! Subsequently, although my schooling was conducted mainly in Sinhala, I always considered English my first language. For example, I avidly read English books, but never once chose to read one for pleasure in Sinhala.
Conversely through university and actuarial exams, when under stress I would always count in Sinhala! I married a South African and our son - born in London - considers himself English but recognises that he is blessed with a rich ethnic heritage that provides extra colour to his life and our experiences together.
Career experiences to date
I don’t feel that either my ethnicity or my gender has disadvantaged my career. For example, I interviewed for three very different organisations on graduation and was fortunate to be offered jobs at all three. After 8 years at Mercer, I joined LCP in 1999, qualifying as an actuary in 2005. The 14 years I took to qualify certainly tested my resilience! Initially working in a traditional actuarial consulting role, getting into the guts of the Finance Act 2004 showed me the delights of interrogating pensions legislation and I moved into a Pensions Research role in 2008. It was hard to gain promotion to Principal, but I feel that was due to working in a non-client facing role, not ethnicity or gender.
In fact, my gender and ethnicity has provided me with insight that has helped secure numerous opportunities. I have sat on LCP’s Women’s Network since its inception and was privileged to be appointed to the inaugural committee of the LCP Foundation.
For SPP, I sat on the Actuarial Committee in the early 2000s, and joined the Legislation Committee in 2016, assuming the Deputy Chair role in 2022 and taking over as Chair in September 2024. I have also sat on the Society’s EDI Group virtually since its inception, taking up the Deputy Chair position this year. I wrote an article on the Ethnicity Pensions Gap last year, and the engagement I had led me to explore this area further, joining the Ethnic Minority Working Group of the Pensions Equity Group and now coordinating exciting qualitative research into the ethnicity / gender pensions gap.
Hopes for the future
I am heartened to see research indicating that the pensions industry increasingly recognises the benefits that EDI brings to decision making, team skills and member experiences. However, I am conscious that while there is more recognition of the benefits of diversity, creating a truly inclusive environment is still not easy. My main hopes for the future are that: inclusion and diversity becomes second nature in recruitment and promotion in the profession, so we no longer have to consciously make EDI a priority, and can just harness the richness of thought and lived experience that diversity brings; that coming generations of pensions professionals from ethnic minority backgrounds, especially women, have more role models that “look like them” for inspiration; and that they know that their voices truly will be heard. This can only be to the benefit of all!
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