We have conducted an Equality Impact Assessment (EIA) following the 2024 annual pay review.
The purpose of this EIA is to assess the impact of our 2024 pay review. We wanted to check it did not unnecessarily disadvantage or inadvertently discriminate against any group protected by the Equality Act 2010.
While there is no legal requirement to conduct an EIA at this point, the assessment will help us analyse the impact on employees. It also demonstrates that we have taken on board the public sector equality duty. This is a duty on public authorities to consider how their policies or decisions affect people who are protected under the Equality Act 2010.
1. Our 2024 pay review: summary
Our annual pay review is part of our employment offer. It is designed to provide fair, competitive pay at all levels and reward strong, consistent performance.
Performance-related pay increases were given to all eligible employees from 1 April 2024 based on their:
- end-of-year performance rating
- current salary position within the 2024 pay ranges
Colleagues with the highest performance rating who were positioned lowest in the pay range were awarded the biggest percentage increase to their base pay. This was to make sure their salaries progress at a faster rate and is intended to tackle longstanding concerns about fair pay progression and help reduce our pay gaps. Being paid at a higher level in the pay range reflects the high standard of ongoing performance the individual is contributing to the organisation.
Our 2024 pay review guidance details the annual pay review in full. The key commitments were:
- award colleagues at senior manager level and below a salary increase of at least 3.5% if they have delivered a strong performance this year and are not subject to maintained pay, with up to 6.5% for our lowest paid best performers
- increase the salary of those who are developing in role or need to improve by 1.5%, with the opportunity for a further 1% increase or uplift to pay range minimum at the 2024 mid-year review stage subject to improved performance
- increase the current pay range mid-points by at least 3% with higher increases in some cases
Different pay awards were applied for apprentices, graduates and level 9 associates in the Supervision Hub and the senior leadership team (SLT). The SLT includes the head of department and director contractual grades.
Overall, the average base salary increase following the annual pay review in April 2024 across the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) was 4.8%. The average salary award for the SLT was lower than the average award for colleagues across the organisation.
This 4.8% figure is expected to increase slightly in October 2024, once the outcomes of the mid-year performance reviews have concluded.
2. Who is affected?
FCA and PSR employees who were eligible for the 2024 pay review.
3. Groups protected by the Equality Act 2010 likely to be affected
This Equality Impact Assessment is based on the impact of the 2024 pay review against the data that we hold on colleagues’ protected characteristics (age, disability, ethnicity, religion or belief, sex and sexual orientation).
Where our analysis shows that there is disparity between the impact of the changes on a particular characteristic as compared with those without that characteristic, we are satisfied that such disparity is a proportionate means of achieving a legitimate aim. Accordingly, we consider that no protected characteristic groups have been disproportionately or unfairly affected by the pay review in a positive or negative way.
For example, our younger employees received on average higher salary increases than our older employees. This is a result of factors such as our younger employees typically being positioned lower in their respective pay range and so were awarded higher increases through the performance related pay matrix. In addition, many of our younger colleagues are in the apprentice and graduate programmes and benefited from higher salary increases.
4. Key notes and assumptions
This Equality Impact Assessment analyses the impact of the 2024 annual pay review on the protected characteristics which we hold data on, checking to ensure these groups were not disadvantaged by the salary changes implemented in April 2024.
Data set
- The data set is based on a population of 4,921 colleagues who were eligible for the annual performance and pay review. Calculations are based on full-time equivalent (FTE) values.
- The analysis is based on the impact of the changes against the data that we hold for colleagues’ protected characteristics (age, disability, ethnicity, religion or belief, sex and sexual orientation). As seen in Figure 1 below, we do not have full characteristic disclosure for all colleagues.
- The data set is based on legal sex as required by HM Revenue and Customs for payroll purposes. This is a binary field (male or female) and is used for the sex characteristic.
- The salaries considered are as at 1 April 2024. This includes a small number of adjustments to individual performance ratings following the conclusion of the end-of-year review process. No mid-year salary uplifts are included in this analysis.
Exclusions
- Colleagues not eligible for the annual performance and pay review have been excluded from this analysis (such as colleagues who joined after 1 January 2024).
- Contingent workers are excluded from the analysis.
- The analysis excludes manager allowance from the comparisons on base pay. This is because the manager allowance is a legacy entitlement and is paid to a small number of employees as a separate allowance via flexible benefits.
Definitions
- Executive directors are included within the director contractual grade category.
- Where ‘average’ is referenced in the analysis, this is the mean value.
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Data table
5. Average salary increases
Figure 2 below summarises the average base salary increase awarded to our colleagues by protected characteristic, location and contractual grade.
The salary increase changes were calculated on the change to base pay following the pay review. It does not take account of the additional pension contribution and flexible benefits accruing from salary uplifts.
The 2024 pay review saw an overall average salary increase of 4.8% across the total population eligible as of 1 April 2024. The resulting average salary is £71,290.
We outline more analysis against colleagues’ protected characteristics, location and contractual grade below.
5.1. Age
Younger colleagues received higher average base salary increases, with those aged 18 to 20 and 21 to 30 years old receiving average increases of 11.2% and 6.1% respectively. Many of our younger colleagues are part of the graduate programme and apprenticeship scheme, where increases were on average 10.3% and 11.0% respectively.
Colleagues in the younger age brackets typically tend to be positioned lower in their respective pay range. As a result, and through the application of the performance-related pay matrix, these colleagues will benefit from greater pay increases. Of colleagues aged 18 to 20, 75.9% were in the bottom third or below their respective 2024 pay range before applying any performance-related pay increase. For those aged 21 to 30, the figure was 89.1%.
Colleagues in age groups from 41 to 50 and over 50 received the lowest average salary increase, at 4.4% and 4.1% respectively. This is largely driven by older colleagues being paid higher in their respective pay range. Those paid higher in their pay range are likely to benefit less from a performance-related pay increase, which is based on a matrix of individual performance rating and position in pay range. Colleagues over the new pay range maximum were also subject to maintained pay in 2024, which limited salary increases.
Of colleagues with a base salary over the new pay range maximum, 56.6% were aged over 50 and 37.2% between 41 and 50.
Of the colleagues in the upper third of the new pay range, 42.5% were over 50 and 36.7% between 41 and 50.
In addition, 89.5% of colleagues within the SLT are over 41 years old. The average salary increase for the SLT grade was:
- 4% for those 41 to 50 years old
- 3.6% for those over 50 years old
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Data table
This chart shows the average base salary increase by age and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
Figure 4 shows the breakdown of the associate population into the 4 grade levels and by age bracket.
Associates aged from 21 to 30 received higher average salary increases than associates in the older age brackets.
Senior associates and level 9 associates aged from 21 to 30 saw the largest average salary increase of 5.4% and 5.2% respectively.
Typically, younger colleagues are positioned lower in their pay range and so receive the biggest percentage increase to their base pay (subject to their end-of- year performance rating).
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Data table
This graph shows average base salary increase of associate colleagues by age and associate grade level.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
5.2. Disability
We do not have full disclosure on disability status, with 26% of colleagues giving no response and 3.1% choosing ‘prefer not to say’.
Disabled colleagues received an average base salary increase of 4.4%, compared to non-disabled colleagues who received an average salary increase of 4.9%.
Figure 5 shows the average base salary increase by disability status and contractual grade.
Before the performance-related pay matrix was applied, the positioning of disabled and non-disabled colleagues across the new pay ranges was similar.
After the performance-related pay matrix was applied, colleagues without a disability received slightly higher increases on average than colleagues with a disability.
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Data table
This chart shows the average base salary increase by disability status and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
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Data table
This chart shows the average base salary increase of associate colleagues by disability status and associate grade level.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
5.3. Ethnicity
The average base salary increase was 5.1% for our mixed/multiple ethnic colleagues, 5.0% for black colleagues, 4.9% other and 4.8% for white and Asian colleagues.
A breakdown of the average base salary increase by ethnicity and contractual grade is shown in figure 7 below.
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Data table
This chart shows the average base salary increase by ethnicity and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
A higher percentage of colleagues who are Asian, black or mixed/multiple ethnicity are under 31 years old, when compared to white colleagues. Some 24.2% of Asian, 28.3% of black and 26.8% mixed/multiple ethnicity colleagues are under 31 years old compared to 18.1% of white colleagues.
As seen in previous years, younger colleagues tend to be positioned in more junior roles and often lower in their pay range, resulting in greater salary increases.
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Data table
This chart shows the average base salary increase of associate colleagues by ethnicity and associate grade level.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
5.4. Religion or belief
When comparing average salary increases across colleagues’ religion or beliefs, there are minor differences.
Colleagues who are Atheist received the highest average increase with 5.0%, followed by Muslim colleagues at 4.9%, Hindu 4.8%, Christian and Sikh 4.7%, Jewish 4.5% and Buddhist 4.3%.
A greater proportion of Atheist and Muslim colleagues are in the lower age brackets compared to colleagues who hold a different religion or belief.
5.5. Sex
The overall average salary increase was 4.7% for men and 5% for women.
The average salary increase by sex and contractual grade is shown in figure 9 below.
There is little difference in the average salary increase between men and women at each contractual grade apart from at the professional support level.
Men in professional support received an average increase of 8.5% in comparison to women who received on average a 5% increase. This is largely driven by the much higher proportion of male apprentices within this grade and the higher pay increases awarded to the apprentice population. If the apprentice population is removed from the analysis, then the average increase in professional support was 4.6% for women and 4.9% for men.
In addition, 15.4% of women, compared to 2.6% of men in professional support were positioned in the upper third or above the pay range maximum when aligned to the new 2024 pay range. The average salary increase is lower for these colleagues due to their higher position in the pay range.
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Data table
This chart shows the average base salary increase by sex and contractual grade.
Figure 10 shows the breakdown of the associate population into the four grade levels.
Women received slightly higher average base salary increases than men at each level.
The greatest disparity is at associate level 9, where women received 5.2% compared to 4.3% for men. There are more women than men at this grade level and over half (55.4%) of the associate level 9 colleagues were women positioned either below or in the bottom third of the pay range, in comparison to 37.9% of men.
Colleagues positioned lowest in the pay range were awarded the biggest percentage increase to their base pay (subject to their end-of-year performance rating).
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Data table
This chart shows the average base salary increase of associate colleagues by sex and associate grade level.
5.6. Sexual orientation
The salaries of bisexual colleagues increased on average by 5.8%, gay/lesbian colleagues by 4.9% and heterosexual colleagues by 4.8%.
Of colleagues who are bisexual, 48.1% are aged from 21 to 30 years old. This compares with 20.1% of heterosexual colleagues and 23.4% of gay/lesbian colleagues. Bisexual colleagues in this age bracket received an average increase of 6.7% compared to heterosexual and gay/lesbian colleagues who received an average of 6% and 6.3% respectively.
Colleagues in the lower age brackets tend to be positioned lower in their respective pay range, and therefore benefit from greater salary increases.
5.7. Location
We are sharing information about the impact of the 2024 pay review on different locations and our consideration of any connection to nationality. We do not hold colleague disclosure information about nationality (such as Scottish) and so have considered this by looking at location.
Overall, London-based colleagues received an average salary increase of 4.9%, compared to 4.2% for colleagues based in Edinburgh and Leeds.
Figure 11 confirms that within contractual grades, London-based colleagues have seen higher average salary increases at the professional support, associate and head of department grade levels.
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Data table
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
A factor driving the difference in the average salary increase is the much higher proportion of professional support and associate colleagues in London. Figure 12 shows the proportion of colleagues in each contractual grade by location. It highlights that 95% of professional support colleagues and 90.7% of associate colleagues are based in London. Colleagues in more junior roles typically received higher average salary increases.
In addition, a greater proportion of London colleagues (58.5%) compared to nationally based colleagues (52.7%) were positioned either below or in the lower third of their new pay range before the performance-related pay matrix was applied.
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Data table
This chart shows the proportion of colleagues by location in each contractual grade.
5.8. Additional protected characteristics
Our view is that the salary changes applied in April 2024 do not affect colleagues based on gender reassignment, marriage and civil partnership, or pregnancy and maternity in a positive or negative way that is disproportionate or unfair.
6. Compliance with the public sector equality duty
To comply with the public sector equality duty[1], we must, in the exercise of our functions, have ‘due regard’ to the need to meet 3 equality objectives under the Equality Act 2010, namely to:
- eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Equality Act
- advance equality of opportunity between people who share a ‘relevant protected characteristic’ and those who do not
- foster good relations between people who share a ‘relevant protected characteristic’ and those who do not
One of the objectives of the pay review is to reduce the pay gaps and increase equality of opportunity between colleagues who share a relevant protected characteristic and those who do not.
Overall, our view is that the changes implemented as part of the 2024 pay review do not affect colleagues with protected characteristics in a positive or negative way that is disproportionate or unfair.
7. Annex A: 'At our Best awards' for 1 April 2023 to 31 March 2024
‘At our Best’ awards scheme
We continue to recognise excellent performance in the moment and have increased the size of the ‘At our Best’ awards scheme budget in line with our headcount growth. The budget in 2024 is more than £1.25m annually.
Colleagues are eligible for single awards of up to £1,000, with a maximum of £2,000 in any performance year.
Any colleague can suggest someone for an award to their local management team.
The analysis in figure 13 below is based on the colleagues included in the Equality Impact Assessment data set. It shows the percentage who received one or more awards from 1 April 2023 to 31 March 2024, against protected characteristics, location and contractual grade.
When looking at awards received by contractual grade, note this is based on the grade level colleagues were at on 31 March 2024. For example, if a colleague received an award when they were a manager but were later promoted to head of department during 2023/24, the award will be captured under the head of department contractual grade.
By age bracket, 44.8% of colleagues aged from 18 to 20 received an award, compared to over 63% of colleagues in the other age brackets. A factor contributing to this is that the majority of 18 to 20 year olds are on the apprenticeship programme and joined in October 2023, which is part way through the awards scheme year.
The recent growth of our Leeds and Edinburgh offices may also have contributed to the lower percentage of national colleagues receiving an award.
In terms of other protected characteristics, although there are some differences between the percentage of colleagues who did and did not receive an award, our view is the award scheme does not affect colleagues based on protected characteristics in a positive or negative way that is disproportionate or unfair.
8. Annex B: Outcomes from end-of-year performance reviews 2023/2024
The FCA/PSR operates a robust performance management process, with 95% of colleagues completing a performance review for the performance year 1 April 2023 to 31 March 2024.
The tables below give a breakdown of the performance review outcomes by protected characteristic.
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Data table
The totals in this table might not equal 100% due to rounding.
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Data table