UK bonuses rise to £42bn despite slump in City payouts
More than £42 billion was paid out in bonuses in the last financial year, an increase of 2.7% on the previous 12 months, despite a slump in payments by finance and insurance firms.
New figures from the Office for National Statistics showed that £13.6 billion of the total was paid in the finance industry in 2014/15, down by 9.6% on the year.
Bonuses in finance and insurance firms have fallen "considerably" since the downturn in 2007/8, down by £5 billion, while in the rest of the economy the figure has gone up by a similar amount.
The biggest rise in bonuses came in professional, scientific and technical services.
The average bonus per employee remained at around £1,500, falling by £800 to £13,100 among finance staff, the ONS calculated.
Bonuses in private firms increased by 4.3% to £41.7 billion, accounting for the vast majority of the £42.4 billion total.
The research showed that bonuses made up over a fifth of total pay in the finance and insurance industry, down from a quarter the previous year.
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 corporate performance and strong business confidence."