Bonuses coming back up to pre-crisis levels -but not for bankers

But bonuses paid to bankers and financial industry staff fell to £13,100 on average, £800 less than the previous year as tougher rules force a change in pay structures.

According to the data from the Office for National Statistics (ONS), total bonuses across all sectors stood at of £42.4 billion for the the year to March – an increase of 2.7 per cent on the previous year and just 0.1 per cent below the peak hit in 2008.

Total bonuses for the financial arena dropped by 9.6 per cent to £13.6bn, the ONS said, largely because the previous financial year had two bonus periods.

However, the news also comes after regulators this summer launched new rules governing bonuses in the banking sector that the Financial Conduct Authority said would “discourage irresponsible risk-taking and short-termism” meaning bonuses could remain suppressed.

The rules say bonuses can be clawed back after 10 years in the event of misconduct cases, and that senior managers cannot receive bonuses until seven years after their performance measurement period has ended.

Non-executive directors in financial companies have been banned from receiving bonuses and managers in taxpayer-supported firms cannot receive bonuses.

The ONS figures showed that the lowest bonuses per employee were paid in the health and social work industry, where the figures were close to zero.

Typical payouts for private sector employees came in at just over £1,800, whereas the average public sector worker’s bonus was about £100.

James Sproule, chief economist at the Institute of Directors, said: “Bonuses are a fundamental feature of a flexible labour market and make up a key component of the remuneration mix.

“They allow businesses to reward staff for their achievements over a set period of time and are often directly linked to an individual’s or the company’s performance.

“This means when times are good, companies can share profits with staff without increasing their labour costs to an unsustainable level.

“Today’s figures, which show both bonuses and base salaries continue to rise, are good news and another sign of improved performance and strong business confidence.”

Lee Biggins, founder and managing director of jobs website CV-library, said: “It’s not surprising that the financial and insurance sectors have not reached their pre-downturn levels as these had touched insurmountable levels in 2006-07. However, the fact that bonuses have increased in the UK as a whole paints a promising picture and it’s hoped that industries still falling behind can catch up soon.

“Bonus schemes are a proven way of incentivising and motivating staff, which has a significant impact on individuals and teams exceeding broader company goals, further contributing to business success and growth. Well-structured bonus schemes are also a great way of attracting new talent to an organisation, which is important in today’s competitive job market.”