City workers are still expecting bonuses to be 6.9% higher than last year despite the impact of the summer’s credit crunch and a string of high-profile headcount culls at some of the world’s biggest banks, according to the latest data from City headhunter Joslin Rowe.

It found that 74% of the 500 financial services professionals polled expect bonuses to increase on last year. Those expecting bonuses to increase expect them to rise by 12%.  Compliance professionals, boosted by the impact of MiFID, are the most optimistic - expecting to see bonuses 25% bigger than last year.  Corporate financiers and investment professionals expect increases of 15%.

The research found that only 6% of financial services employees expect a decrease, while 20% expect them to stay the same.

Tara Ricks (pictured), managing director of Joslin Rowe Associates, says: “Companies are still absorbing the effect of financial market turmoil and we should expect lower payouts this year. Clearly employees still have overblown bonus expectations – they are behind the curve.  We would anticipate a lot of expectation management in the coming weeks from firms in the sector.”

The research revealed that UK financial services salaries have risen only very slightly since October 2006, from £35,905 to £36,484. The 1.6% increase contrasts unfavourably with recent data from the Office of National Statistics which showed an annual growth of 3.7% in the nation’s average earnings (excluding bonuses) in the three months to August. 

It found that in October 2006 temps across the UK’s financial services industry were earning an average of £14.46 an hour, which has now fallen to £14.16. The average hourly rate in the City itself, however, has gone up 6.2% in the last year - from £15.96 to £16.95. 

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