August 29, 2014 / 4:15 PM / 5 years ago

UK bankers' bonuses rise twice as fast as rest of workforce

LONDON (Reuters) - Bonuses for Britain’s bankers and insurance workers rose at double the pace of those for the total workforce last year, despite politicians’ and regulators’ attempts to clamp down on bumper payouts at financial firms.

A worker arrives at his office in the Canary Wharf business district in London February 26, 2014. REUTERS/Eddie Keogh

Employees in the finance and insurance industry were on average paid a bonus of 13,300 pounds in the year to April, up 5.5 percent on a year earlier, according to data released by the Office of National Statistics (ONS) on Friday.

Across the whole of the UK workforce, the average bonus per employee was just over 1,500 pounds, 2.6 percent higher than the previous year.

Politicians have been trying to crack down on generous bonuses in financial services following the credit crunch. Many blame such incentives for encouraging excessive risk-taking, which destabilised banks that then needed to be bailed out.

The Bank of England last month tightened measures around bonuses, increasing the number of years in which payouts can be clawed back to seven.

The European Union has also introduced a new rule that limits bonuses to no more than annual salary, or twice that with shareholder approval. It will apply to awards handed out from early 2015.

Banks including Barclays and Bank of America Merrill Lynch have found ways to counter the cap, such as hiking fixed pay and giving special allowances.

Mining and quarrying workers were paid the second-highest average bonuses of 7,000 pounds. Employees in education, health and social work fared the worst, with negligible bonuses per head figures, the ONS said.

A total of 40.5 billion pounds was paid out in bonuses to British workers in the 12 months to April, almost 5 percent more than in the previous year. The finance and insurance industry contributed 14.4 billion pounds of that figure.

Bonus awards made up 6 percent of total pay across the whole economy, the highest percentage since before 2008 and the economic downturn, when bonuses accounted for 7.1 percent.

Reporting by Clare Hutchison; Editing by Mark Potter

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