UK bonus culture spreads as payouts exceed £44bn

The total amount of money paid as bonuses by British companies surpassed pre-crash levels for the first time last year, according to official figures.

Data from the Office for National Statistics shows that British businesses paid out a massive £44.3bn in the 12 months to March, a rise of 4.4 per cent compared to the previous year.

In cash terms, this beats the record that was in place before the 2008 financial crisis led big banks in the City to reduce payouts.

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While finance and insurance companies remained the biggest contributors to bonus expenditure, the Daily Telegraph says this time around despite the overall rise "it isn't the City boys who are cashing in".

Other sectors such as IT and communications services have emerged as the biggest drivers of growth over the past decade, the paper adds.

The amount paid to the average finance professional was lower in the most recent period, at £13,400, than the record high of £15,000 paid in 2013. However, the average for the sector still dwarfs most others.

In contrast, people working in the health and social sector got virtually no variable top-up to their pay packet on average.

The City's bonus culture "was widely blamed for fuelling the credit boom and financial crisis by rewarding bosses and traders with cash for short-term results," says The Guardian.

With recent evidence showing that payouts do little for companies in the long run, big firms – including advertising giant WPP and BP – have faced shareholder revolts over the amounts awarded to top executives.