UK banker bonuses fall to £13 000 on average | Fin24
 
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UK banker bonuses fall to £13 000 on average

Aug 26 2015 18:16

London - Bonuses paid to bankers and financial industry staff in Britain fell last year to £13 100 on average, down £800 or 6% from the previous year, as tougher rules force a change in pay structures.

Total finance industry bonus payments fell 10% 13.6 £bn and are down more than a quarter from their 2008 peak, figures from Britain's Office for National Statistics (ONS) showed on Wednesday, although payouts were still more than eight times the average of £1 500 across all industries.

Since peaking at £18.7bn seven years ago, bonuses in the financial sector have been capped by European rules, designed to reduce the motivation for risky trades that generated lucrative short-term returns but are blamed for helping create the 2007/09 financial crisis.

Under the EU regulations, payments can be equal to basic annual salaries, or twice that level if shareholders give their permission. Banks have bumped up fixed pay as a result, and are also deferring bonuses and awarding more in shares.

The ONS data cover all of Britain, but the biggest bonuses are paid in London, where UK firms and dozens of the world's biggest banks, insurers and asset managers have thousands of staff. Payouts to top earners such as investment bankers and asset managers can reach millions of pounds while branch staff typically get far more modest rewards.

Cash bonuses across the finance industry last year represented 20% of overall pay in the sector, down from a peak of 34%, the ONS said. Bonuses typically make up about 4% of pay in the rest of the economy.

Some 73% of finance industry bonuses were paid during the so-called "bonus season" from December to March.

The ONS said cash bonuses across Britain in the 2014/15 financial year totaled £42.4bn, up 2.7% from the previous year and just 0.1% below their record level reached in 2007/08.

The drop in finance and insurance industry awards was offset by a 10% annual rise in payouts in the rest of the economy, to £28.8bn.

The professional, scientific and technical services industry saw the biggest jump in bonuses last year, with average payouts rising to £2 500 from 2 100.

banking  |  financial services  |  companies
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