City Bonuses 'To Rise 21%' Despite Cap Rules

Bonuses for senior City workers are tipped to rise by 21% in 2015, despite the latest regulatory crackdown in the wake of the financial crisis.

The report by recruitment firm Astbury Marsden found that top staff could expect average awards of £124,000 - up from £102,000 - with a pick-up in activity and profitability raising pressure on employers.

Adam Jackson, director at Astbury Marsden, said: "Business conditions in the City have improved significantly over the last year, which is now translating to rising bonus expectations.

"Despite shareholder and public pressure to limit bonuses - and with the EU bonus cap now set to be introduced at the start of 2015 - City staff clearly feel that their employers are in the position to reward them well."

The cap, which became law in January 2014 to take account of bonuses to be paid in 2015, is aimed at 'risk-takers' - particularly in the banking sector.

The law limits a worker's extra pay to 200% of salary - if shareholders agree.

Banks have moved to sidestep the rules by hiking salaries in some cases, arguing that a failure to reward key personnel in London would drive them away to Asia or the United States.