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

Ferrari 60 14

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

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.

Here is the chart:


“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.

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.

NOW WATCH: Things are getting worse for Wells Fargo and now the FBI is getting involved