FT readers anticipate to take pleasure in greater payouts this bonus season, however complain they’re having to work tougher for his or her bonuses as tax will increase chew and efficiency metrics alter.
Greater than 1,000 readers offered detailed responses to our annual bonus survey, with simply over half saying they anticipated a much bigger or considerably greater payout than final yr.
These working in banking and funding banking had been probably to report βsubstantialβ will increase as UK and US banks scrapped the EU bonus cap, enabling payouts of as much as 25 instances primary wage at some establishments.
Excessive flyers within the authorized occupation and asset administration sector additionally reported huge will increase, however the two worst performing sectors had been vitality and administration consultancy, with the best numbers of respondents reporting bonuses value βconsiderably much lessβ than final yr.

Round one in 10 respondents stated the metrics used to measure their efficiency had modified this yr β the bulk in banking. Some complained that βfastened pay inertiaβ had set in, so whereas their bonus had risen, total compensation packages had been pretty flat.
Readersβ detailed responses additionally expressed uncertainty about pay and efficiency within the yr forward. Will we see a blockbuster yr of M&A as President Trumpβs re-election stokes animal spirits and bonus caps are lifted? Or will a world commerce warfare and tax modifications within the UK Price range crush any prospect of a bumper payout subsequent yr?
Most readers who accomplished our survey in 2025 anticipated fatter payouts than final yr, with 15 per cent in line for a bonus of between Β£250,000 and Β£2mn, in contrast with 10 per cent in our 2024 ballot.
One in 5 respondents stated they anticipated a bonus of between Β£100,000 and Β£250,000, up from one in eight final yr. This yrβs pattern dimension was admittedly smaller, however of their detailed responses, many readers stated that whereas bonuses had elevated, so had using deferral mechanisms (see beneath).


Removed from feeling richer, a temper of warning prevailed in readersβ detailed feedback as bonus payouts struggled to maintain tempo with elevated dwelling prices together with VAT on faculty charges and better mortgage charges.
In whole, 14 per cent of readers stated they meant to spend most of their bonus β a two proportion level uptick on final yr β and 17 per cent meant to make use of their bonus to pay down debt, assuming they had been nonetheless in line to obtain a payout.
βI want Iβd paid off my mortgage earlier as a substitute of shopping for a ship,β regretted one retail govt, who stated his bonus had been cancelled this yr after weaker gross sales and better prices ensuing from Price range modifications to employerβs national insurance.
Practically one in three readers stated Octoberβs Price range had influenced how they might deploy their bonus cash this yr, with Januaryβs will increase to private school fees upsetting essentially the most ire.
One reader in monetary providers stated he was setting apart his whole Β£50,000 bonus to deal with the βspiteful impositionβ of VAT on faculty charges, predicting this is able to hitΒ UK financial exercise: βI do know that many differentΒ mother and father are doing the identical as me and spending far, far much less on different objects, so many companies can be feeling the pinch.β
βI now must earn considerably greater than final yr to cowl VAT on faculty charges and mortgage prices, that are all rising,β stated one reader within the oil and fuel sector, who expects a considerably diminished bonus this yr.
It wasnβt simply mother and father who stated the Price range had made them extra cautious with their bonus cash. βSpending much less and saving extraβ was the second mostly expressed response in our ballot, with causes cited together with fears of redundancy, plus the chance of additional tax rises and the UK financial system weakening additional.
βAbout 80 per cent of my peer group (male, aged 50+) have been let go in recent times, so I’m considerably hesitant in spending the bonus I acquired,β stated one banker anticipating a payout of greater than Β£100,000. βIβd quite save or make investments it to organize for the inevitable.β
Of those that had been meaning to spend nearly all of their bonus cash, one in 5 stated they might use the money to pay down a bit of their mortgage, and a handful of high-earning youthful respondents stated they meant to clear their scholar loans early. This can be a far cry from the exuberance generally related to bonus season.
βFinal yr, I purchased an aeroplane (gentle sport plane) however crashed it after three months. I’ll make investments my bonus this yr,β vowed one asset supervisor anticipating a payout of between Β£50,000 and Β£100,000.

Regardless of the gloomy sentiments, this yr has seen a 5 proportion level swing again in favour of investing nearly all of any bonus β essentially the most tax-efficient use of the money.
Probably the most noticeable bounce was the elevated attractiveness of stocks-and-shares Isas, with 55 per cent of this yrβs respondents saying all or a part of their bonus was destined for the tax-free funding accounts, in contrast with 33 per cent a yr in the past.

βIsasΒ seem essentially the most tax-efficient vessel, with fewest rumours of basic change,β stated one banker anticipating a payout of over Β£100,000.
Readersβ detailed feedback confirmed that many have actively determined to deprioritise pension saving after inheritance tax modifications had been introduced final yr β the fifth most typical response to the Price range query β even when they’ve but to earn sufficient to be affected by the annual allowance taper, which reduces tax-free pension contributions to only Β£10,000 a yr for the best earners.
βI’m deprioritising my pension, as I now absolutely anticipate the foundations to be modified sooner or later and have misplaced belief within the system,β stated one hedge fund supervisor anticipating a bonus of over Β£100,000.
βUsually I’d put a bit of my bonus into my pension, however the tax guidelines preserve altering and I’m fairly assured that earlier than I retire they are going to be so detrimental to anybody with a pension pot value having that thereβs little level committing to it any extra,β stated a dealer anticipating a payout of over Β£100,000.
Nimesh Shah, chief govt of Blick Rothenberg, an accountancy agency, says he has seen fewer shoppers opting to βpension their complete bonusβ this yr, with many additionally in search of to max out Isas for themselves, their accomplice and their kids. Though Isas don’t have any upfront tax aid, future tax-free withdrawals and larger flexibility over when funds may be taken have boosted their attraction.
βUnderneath-50s in impact get a Β£21,000 Isa allowance, as they obtain a Β£1,000 authorities bonus in the event that they make investments Β£4,000 right into a Lifetime Isa,β he says. It’s a must to be underneath 40 to open a Lifetime Isa, however can preserve paying into it for 10 extra years, though the funds are usually not accessible with out penalty till age 60.

Nevertheless, one group of survey respondents felt they’d no alternative however to pay extra of their wage and bonus cash into pensions β these caught by the so-called six-figure wage lure.
Readers generally reported utilizing wage sacrifice schemes to spice up office pension contributions and scale back their taxable pay beneath Β£100,000 on paper. This fashion, they keep away from excessive marginal charges of tax on the slice of earnings between Β£100,000 and Β£125,140 as the private allowance is clawed again, and may retain priceless childcare advantages together with βfreeβ nursery hours and tax-free childcare that might be misplaced if one dad or mum earned greater than Β£100,000.
βPaying right into a pension is basically the one choice for me,β stated one reader working in insurance coverage anticipating a bonus of as much as Β£50,000. βIf I didnβt, my bonus could be topic to tax and nationwide insurance coverage at 62 per cent, plus I’d lose my daughterβs nursery hours. I’d love to make use of this cash to assist pay greater mortgage funds and ever-increasing nursery charges, however the maths doesnβt work.β
A sentiment generally expressed amongst FT readers was to maintain maximising tax allowances earlier than the federal government additional reduces them.Β Many feared the enlarged pensions annual allowance of Β£60,000 would be the subsequent for the chop.

βI’m feminine, in my 30s with out kids (however I could have them ultimately) so Iβm making an attempt to place 30-40 per cent of my whole pre-tax earnings into pensions, together with my bonus,β commented one reader in tech anticipating a Β£10,000 payout. βIf in future I would like to chop down on pension contributions as a result of the price of having kids, I can accomplish that simply realizing that I’ve front-loaded quite a lot of the trouble of saving for retirement, and can have over thirty years for compounding magic to happen.β
This yrβs survey additionally confirmed one in three readers meant to take a position a few of their bonus cash into normal funding accounts (GIAs), in comparison with only one in 5 final yr.
Of their extra detailed feedback, loads of readers famous the attractiveness of buying gilts inside a normal funding account. Whereas earnings is taxable, no capital features tax applies to funding progress, that means bonds buying and selling beneath their face worth can ship tax-free returns for traders who redeem at maturity or promote above the acquisition value.

This yrβs ballot additionally instructed readers have a larger urge for food for threat, with an uptick in these planning to make use of enterprise capital trusts (VCTs) and Enterprise Funding Schemes (EIS) to make long-term investments into smaller UK corporations, attracted by upfront tax aid of 30 per cent.
Adam Walkom, co-founder of Everlasting Wealth Capital, a monetary planner, says that whereas shoppers had been intrigued by the tax advantages, they had been cautious of the chance that smaller UK companies might take an outsized hit in an financial slowdown.
βThe benefit of a VCT is that itβs a pooled method, so that you would possibly personal one VCT fund which has say 30 of those explicit sort of corporations,β he says. βNevertheless, once you examine the funding prices to straightforward index funds, they appear horrific. VCT funds generally have annual charges someplace between one and two per cent; thereβs 1 per cent dealing prices, and you might should pay an exit payment of 5 per cent to get out, which needs to be considered.β
Regardless of the dearth of tax benefits, the proportion of readers who deliberate to take a position a few of their bonus cash into cryptocurrencies has almost doubled in a yr, at 6 per cent, as President Trump vows to make the US the βcrypto capital of the planetβ.
βA bullish yr for crypto, so I’ll make investments my bonus in that together with my Nasdaq and S&P trackers,β stated one UK-based recruitment guide, including that the eventual capital features hit on crypto had not put him off.

On the different finish of the chance spectrum, many readers confessed they had been in βmortgage pay down modeβ this bonus season, as fixed-rate offers expire, and rates of interest look set to stay greater for longer.
βMortgage discount is the one recreation on the town,β stated one reader in assetΒ administration whose five-year repair has one yr left to run. They intend to sink their whole Β£100,000 bonus into this (observe that after extra price earnings tax and Nationwide Insurance coverage, this can be diminished to Β£53,000).Β
βIβm utilizing my bonus to pay down the mortgage to cut back the volatility arising from the variability in earnings, which is a continuing concern for most individuals within the monetary trade,β commented a dealer who expects to obtain a bonus of over Β£50,000.
βMetropolis employees could possibly be on a pleasant bundle of Β£300,000 however once you take a look at their internet disposable earnings after tax, mortgage funds and better charges for a few kids at non-public faculty, thereβs usually not an terrible lot left,β says Adrian Anderson, managing director of mortgage dealer Anderson Harris.

He stated excessive earners on interest-only mortgages had been essentially the most uncovered to βcost shockβ. Within the days of rock-bottom charges, many purchasers considered interest-only loans as βpaying an affordable βhireβ secured towards an asset that was going up in worth.β Mortgage charges have shot up because the pandemic, however prime central London property values haven’t, therefore extra shoppers are utilizing bonuses to pay down debt and scale back month-to-month repayments.
An underlying sentiment expressed in readersβ detailed feedback was the need to promote up within the UK and transfer someplace hotter with decrease tax charges β and older readers with giant pensions weren’t the one ones.
βIβm saving my bonus with a view to leaving the UK within the subsequent 5 years,β stated one reader working in enterprise capital, who expects a bonus of as much as Β£50,000. βAs an EU citizen from a rustic the place there are good jobs and considerably decrease prices of elevating kids, it makes me extra aggravated at tax modifications. If the tax setting was completely different I’d purchase a much bigger residence right here and be completely satisfied to remain indefinitely.β
The altering form of incentive pay
This yrβs survey exhibits that the lifting of the EU-era bonus cap has allowed banks to reward their high expertise with bumper payouts, writes Jamie John.
The perfect performers at US banks within the UK have acquired uplifts of 40 to 45 per cent, says Matt Nicholson, head of Europe at recruiter Selby Jennings, who says the βgreatest shift available in the marketβ has been a push by funding banks to compete with buy-side companies on pay. βFamily-name banks are actually wanting on the hedge fund world as their competitors,β he stated. βThe bonuses there are severely goodβ.
Nevertheless, there are giant disparities between the very high performers, who can earn huge sums in incentive pay, and people who fall in need of these lofty heights. Many readers informed us they felt short-changed by their employers, expressing frustration that base salaries had stagnated whereas the proportion of deferred bonuses had risen, that means that workers might want to lock in with their present employer for longer to entry the cash progressively.
βIβve been right here for 15 years and have by no means seen individuals so indignant, in any respect ranges,β stated one banker, who added that every one however the highest income mills had been anticipating solely single-digit bonus rises in proportion phrases β βnot precisely inflation crushingβ. So-called βmaterials threat takersβ on the agency, nevertheless, might theoretically earn a bonus of as much as 25 instances base pay.
Not all is effectively on the buy-side, although. Asset and wealth managers bemoaned an absence of transparency in the best way bonus funds had been calculated, with one complaining his employer had adopted a brand new βefficiency ranking (learn: administrationβs whims)β.
Bonuses βhave a tendency not to be pushed by one revenue metricβ, explains David Ellis, head of strategic reward advisory at accountancy group BDO. Firms have as a substitute come to rely on a broader vary of efficiency measures corresponding to buyer satisfaction, that means that whereas whole bonus swimming pools might need elevated in keeping with income, the rise βhas not been shared between individuals on a pro-rata foundationβ.
Trying ahead, Andrew Patterson, accomplice at Clifford Likelihood, a regulation agency, expects prospects for UK-based bankers will proceed to learn from the lifting of the bonus cap and an extra simplification of guidelines on bankersβ pay anticipated later this yr. The Prudential Regulation Authority has proposed the discount of deferral durations and permitting bankers to earn dividends on share-based bonuses whereas they’re deferred. Patterson thinks the modifications will collectively put βUK on a extra even footing with key world monetary centres exterior the EUβ serving to to βentice and retain high expertiseβ.
All illustrations by Jamie Portch