TUC – City bonuses have risen at over twice the speed of wages since the financial crash
- Average bonuses in the City have now reached £20,000 and have increased by £5,000 over the last year
- City executives receiving more in bonuses than teaching assistants and minimum wage workers earn in an entire year
- “No justification for lifting cap on bonuses”, says TUC
- Ministers accused of “lining the pockets of financiers” while “holding down the pay of millions”
City bonuses have risen at over twice (2.6 times) the speed of wages since the financial crash, according to new TUC analysis published today (Friday).
The analysis shows that average City bonuses have doubled in cash terms (+101%) since 2008.
Bonuses in the finance and insurance sector are now worth, on average, around £20,000 a year – their highest level on record.
Bonuses accelerating this year
The analysis reveals that the average value of City bonuses has accelerated over the last financial year – shooting up by a third (35%).
In 2020/21 the average bonus in the finance and insurance sector was £14,800.
But in 2021/22 it had risen to £19,950 – an increase of £5,000.
‘Millionaire’s playground’
The TUC says those at the top of the banking and finance sector will receive bonuses that far exceed £20,000.
According to the European Banking Authority (EBA), the UK is home to 3,500 millionaire bankers – nearly three-quarters (73%) of Europe’s total.
Under the current cap an employee’s bonus can be no bigger than 100% of their annual pay, or 200% if there is approval from shareholders.
However, plans unveiled by Chancellor Kwasi Kwarteng in the mini budget will remove the cap on bonus payments.
Income divide
The TUC’s analysis reveals that the average City banker now pockets in bonuses alone:
- 145% of an average teaching assistant’s pay
- 115% of a full-time minimum wage workers’ pay
- 64% of an average worker’s pay
- 65% of an average nurse’s pay
- 55% of an average teacher’s pay
The union body says there is “simply no justification” for the government lifting the cap on City bonuses – especially with millions of families struggling to make ends meet.
TUC General Secretary Frances O’Grady said:
“Everyone who works for a living deserves to earn a decent living.
“But ministers are holding down the pay of millions of key workers, while lining the pockets of City financiers.
“There is simply no justification for lifting the cap on bankers’ bonuses – especially when nurses and teaching assistants are having to use foodbanks to get by.
“Instead of featherbedding the 1%, the government should be getting wages rising across the economy.
“That means boosting the minimum wage to £15 an hour as soon as possible, funding decent pay rises for all public sector workers and introducing fair pay agreements for whole industries.”
On the need to tackle City excess, Frances added:
“The City is already a millionaire’s playground. It doesn’t need another helping hand from the Conservatives.
“Ministers should be clamping down on this greedy bonus culture by putting workers on company pay boards and introducing maximum pay ratios.
“But this is a government on the side of the super-rich – not working people.”
Unite the union represents frontline workers in the banking sector. Unite General Secretary Sharon Graham said:
“Some companies in banking and insurance have been profiteering on the back of inflation after having already been making massive profits year on year. Now this government has removed the cap on mega-bonuses for bankers that was meant to help prevent us having to pay for another crash like 2008.
“But frontline workers in bank branches and contact centres are totally removed from this gravy train and are feeling the pain of rocketing inflation along with the rest of the country.
“Finance bosses need to stop handing over enormous sums to those at the top of the tree and give their lower paid workers a proper piece of the pie.
