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UK bonuses hit new record 8 years after the collapse of Lehman Brothers

Sep 16, 2016, 12:23 IST

Ferrari

It has been eight years since the 2008 collapse of Lehman Brothers and bonuses are back.

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Total bonus payments in the year to March 2016 increased 4.4% to £44.3 billion ($58.6 billion) - a new record - according to the Office for National Statistics.

It marks the first time that the bonus total beat 2008's record of £42.5 billion.

The finance sector made the largest contribution to the total with £13.9 billion, but bankers' bonuses are still growing at a much slower rate than those in other industries.

Finance bonuses grew by 2.2% year-on-year, while the average for the country was 5.4% growth.

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Here is the chart:

ONS

"Although the finance and insurance industry retains the largest share of the total, other industries, particularly among professional and high-tech business services, have been the biggest drivers of growth since 2008," ONS statistician Nick Palmer said.

Finance professionals were paid the highest average bonus, at £13,400, while health and social care paid the lowest average bonus, at "close to zero," according to the ONS.

The past year has been a record year for nominal bonus amounts, but when looked at as a percentage of total pay, the bonus is in decline.

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Here are the key stats:

  • Bonuses as a percentage of total pay were 6.0% for the whole economy, a small increase on the previous financial year.
  • Bonuses contributed just over one fifth of total pay in finance and insurance in the 2015-16 financial year, at 22.7%. This is down from 23.1% of total pay in the previous year and compares with a peak of 34.1% seen for the financial year ending 2007.
  • Annual bonuses as a percentage of total pay for the whole economy peaked in the financial year ending 2008, when they contributed 7.1% of total pay, which indicates that growth in bonuses has not kept up with growth in regular pay.
  • In 2015-16 bonuses contributed 4.5% of total pay, the highest since the series began. Bonuses contributed 7.3% of total pay in the private sector, compared with 0.5% in the public sector.

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