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Bonuses are at their highest rate since the financial crisis according to a report by the Office for National Statistics (ONS).
There were £40.5bn in bonuses paid out across Britain between May 2013 and April 2014, an increase of 4.9% on last year and the highest rate since the same period between 2007 and 2008, which was the year before the financial crisis really took hold.
About 36% of all bonuses (£14.4bn) went to the finance and insurance sector, which was the largest recipient of bonuses in cash terms.
How much of people’s pay comes in bonuses?
Bonuses made up about 6% of pay for the whole economy, which is again the highest rate since the year to April 2008 where they contributed 7.1%.
However if you isolate the financial and insurance sector then bonuses are a much bigger contributor to overall pay. In the year ending April 2014 they stood at 24.2%, so almost a quarter of what was being earned. This proportion peaked in the year to April 2007 at just over a third (33.9%) of overall pay.
Omitting the financial sector from the whole economy figures shows that for everyone else bonuses made up about 4.2% of total pay. This proportion has remained relatively stable since the year ending 2001 when this data began being collected.
Bonuses per head by industry
The eagle eyed among you may have noticed that we are not talking in financial years (April to March) but May to April. This is because many employers deferred some of their bonus payouts for the 2012/13 year until April 2013 for tax purposes (and to a lesser extent April 2014 for the following year).
If we were to look purely at the financial year then bonuses would have gone up by 12% in 2013/14 compared to 2012/13, which was an average of just over £1,500 per employee.
In the table below you can see how the average bonus per employee in each industry has changed in both the financial year and the like-for-like May to April comparison.
In the last financial year the average financial and insurance activities employee received £13,800 in bonuses while mining and quarrying employees came out in second place with an average payout of £7,100.
A worker in the private sector got £1,800 on average while for a public sector employee it was just £200. Bonuses in the public sector as a whole decreased by 16.3% to £1.3bn in the year ending April 2014, which was partly due to the privatisation of the Royal Mail in October 2013.
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