Tougher rules see UK bank bonuses down 6%

Bonuses paid to bankers and financial industry staff in the UK fell last year to £13,100 (€17,800) 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% to £13.6bn and are down more than a quarter from their 2008 peak, figures from the Office for National Statistics showed yesterday, 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. Payments can now be equal to basic annual salaries, or twice that level if shareholders give their permission.

The data cover all of the UK, 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.

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.

Reuters