Yes, banking is still the best industry for becoming rich
With Google reportedly paying some of its developers $500k, Facebook making two new programmers monumentally wealthy and Aldi paying some of the highest graduate starting salaries in the UK, anyone might think that banking has lost some of its financial lustre. This is not the case. If you want to get rich in Great Britain, banking is still best. So says a new study by academics at the London School of Economics' Centre for Economic Performance.
You can read the full study here. Or you can read our super-quick summary, below. Figures are derived from data provided by the Office of National Statistics.
1. A lot of rich people in the UK are bankers.
In 2008 (seemingly the most recent figures), 28% of all top percentile earners in the UK were London bankers. Since then, bankers' share of the top percentile pay has almost certainly risen.
2. These rich bankers are very rich. They are richer than other rich people. And they are becoming even richer fast.
The average wage of workers in the top percentile of Britons rose from £278k in 2008 to £284k in 2011, an increase of 2.3%,
By comparison, the average wage of bankers in the top percentile rose from £325k in 2008 to £353k in 2011, an increase of 8.6%. Over 75% (1.4 out of 1.8 percentage points) of the increase in the top percentile’s share of the UK wage bill between 2008 and 2011 went just to bankers. This is in spite of them only accounting for one-third of top percentile earners
3. Bonuses are integral to banking riches
Much as the EU has been attempting to curtail bonuses, they remain the source of bankers' financial supremacy. The entirety of the pay gain for top percentile workers between 2008 and 2011 was due to bonuses, the study found. On average, top percentile workers in finance received 44% of their total compensation in the form of a bonus
4. You're no more likely to find yourself unemployed if you work in the financial sector in London than elsewhere
Finally, being a banker is often seen as like being a footballer or rock star: you have a few good years and then you lose your job.
However, the LSE study suggests this is not so. It actually found that a finance worker in London was 2.2% more likely to have a job than an employee in any other industry in the UK. Therefore, not only do you earn more in banking, but your pay is rising faster than in other industries and your job is more secure than in other sectors. Maybe it's not such a bad career after all.
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