City bonuses plunge again but other sectors begin to recover

Tim Wallace
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FINANCIAL services workers saw their bonuses drop last year, official data revealed yesterday, while bonuses increased in almost every other industry.

The payouts for workers in financial and insurance activities slumped nine per cent to a total of £13.3bn in 2011-12, down from £14.6bn in 2010-11.

And that is well below the peak of almost £20bn paid out in 2007-08.

The drop takes the average payout per worker in the industries down 11 per cent from £13,500 to £12,000.

The industry has yet to recover from the financial crisis, with banks still under pressure to keep costs low, raising capital levels instead of giving out bonuses.

And although financial bonuses had shown some signs of life in 2010-11, the Eurozone crisis has further knocked market activity. In particular, the lack of merger and acquisition activity, as well as initial public offerings, means there are fewer big deals for investment bankers to earn high payments on.

Meanwhile total bonuses across all sectors rose from £36bn to £37bn, meaning financial sector bonuses now make up just 36 per cent of the total.

The second largest sector by bonus was information and communications, which saw a 16 per cent rise from £3.9bn to £4.5bn, followed by the professional, scientific and technical sector which recorded a 19 per cent jump from £3.3bn to £3.9bn.

And by average payout per worker, the second largest is £6,900 in mining and quarrying, up nine per cent on the year.