The UK has reclaimed its position as the highest-ranking G7 economy for women’s workplace equality, but a major new report warns this masks a stagnation in progress and significant regional divides, with Wales falling behind.
According to the 2026 Women in Work Index from professional services firm PwC, the UK now sits 17th out of 33 OECD countries, a one-place rise. However, analysts state this improvement stems largely from other nations slipping back, rather than meaningful domestic gains.
The annual index, launched in 2011 and based on 2024 data, reveals progress across OECD nations has slowed to its weakest rate since the pandemic, driven by a historic fall in women’s full-time employment and rising unemployment. The UK’s performance is held back by these same pressures.
Wales Slips as Regional Picture Shifts
Within the UK, the league table of 12 nations and regions shows a reshuffle. The South West of England now tops the index, having risen from sixth place, buoyed by increased job opportunities and a higher female participation rate. Scotland retains its leading position among UK regions for a second year, with a notably low gender pay gap of 8.3%. Northern Ireland climbed two places to second, boasting the UK’s lowest gender pay gap (7.5%) and lowest female unemployment rate (1.6%).
Wales, however, has fallen two places to seventh. While its gender pay gap, at 9%, is significantly below the UK average of 12.4%, its ranking was dragged down by the lowest rate of female full-time employment in the report at 58%, and a drop in the female labour force participation rate to 71.7%.
“While slipping to seventh place… reminds us that there’s plenty to do on the journey to gender parity in the workplace in Wales, it’s great to see the gender pay gap fall into single figures for the first time,” said Stuart Couch, market senior partner for PwC in Wales. He identified the pressure on women to work part-time due to childcare costs and caring responsibilities as a key challenge.
London was ranked the lowest of the 12 areas assessed. Notably, the gap between the highest and lowest performing regions has narrowed by 7.5 points this year, a reversal of last year’s trend, largely due to strong momentum in the East Midlands which saw a significant increase in female participation.
Childcare, AI and the ‘Motherhood Penalty’
The report identifies several entrenched barriers. High childcare costs remain a critical issue, with the UK having some of the most expensive provision globally. PwC notes that net childcare costs can represent almost a third of income for an average UK family, compared to 1% in Germany. This financial burden leads many women to reduce hours or leave work entirely, exacerbating the “motherhood penalty” where the participation gap between men and women is largest during peak childbearing years.
Emerging technologies also present a complex challenge. The rapid development of Artificial Intelligence risks disproportionately affecting jobs dominated by women, particularly in administrative roles. Employed women are almost twice as likely to work in jobs at high risk of automation. Furthermore, PwC’s research indicates women are adopting generative AI at a lower rate than men, partly due to ethical concerns, potentially leaving them behind in skills development.
“The countries that succeed will be those that invest in strong foundations in education and continued skills development,” said Carol Stubbings, UK and EMEA managing partner at PwC. “Employers have a crucial role in creating clear pathways into work and helping their people continue to learn and adapt.”
The Economic Cost of Young Women Left Behind
A particularly worrying trend highlighted is the rise in young women not in education, employment, or training (NEET). The report states nearly 946,000 16-to-24-year-olds – almost one in eight – are now NEET. For young women, low GCSE attainment is a more significant predictor of NEET status than for young men, reflecting gendered labour market patterns where boys with low qualifications often have more accessible routes into sectors like construction.
The economic cost is stark. PwC calculates that bringing female NEET rates in line with Germany could add £5 billion to UK GDP, while matching the Netherlands could deliver up to £11 billion. More broadly, the analysis emphasises a clear link between female workforce participation and productivity.
PwC’s data suggests that if women had access to adequate childcare and could work their desired hours, their earnings could increase by £7.6bn to £10.9bn annually, generating up to £28.2bn in economic output. The message from the report is unequivocal: supporting women’s economic participation is not just a social goal, but a fundamental economic imperative.
