The finance and insurance sector has always been associated with big money – however, it appears its share of the financial pie may actually be falling.
The Office of National Statistics has released official figures showing the level of bonus payments being handed out by Britain’s employers in the UK – with the number now hitting £44.3 billion, which surpasses the boom year of 2007/8 ahead of the economic crash. However, the finance and insurance industry saw bonuses rise by just 2.2% during the last year compared to 5.4% for the rest of the economy and 9% for the information and communication industry. The industry now takes 31% of the total bonus pool – a fall from 47% in 2006.
The relatively muted level of growth appears to be a result of tight regulation and tougher conditions since the financial crisis with it now possible for bonuses to senior bank managers to be withheld for 10 years, as well as the fact that the EU introduced a cap on bonuses.
Still, it’s not exactly doom and gloom for the industry with the average bonus per employee in the finance and insurance industry standing at £13,400 – by a long margin the biggest overall. It far surpasses the private sector average, which stands at £1,900.
According to a
Financial Times report, the growth in bonuses comes in spite of evidence that employees judge bonuses to be divisive and unfair. It cites a global poll showing that the UK has the second-least meritocratic bonus system in the world. Indeed more than a third of UK finance professionals believe bonuses for top earners were undeserved.
Where do you stand on the issue of bonuses? Do you believe there should be a cap on the bonuses received by those in senior positions? Leave a comment below with your thoughts.
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