Nearly 84,000 people are expecting to receive monetary bonuses in excess of £100,000 for the 2007/2008 financial year, according to new research1 commissioned by Investec Private Bank (‘Investec’). A further 294,000 expect bonuses of between £50,000 and £100,000.
In total, four out of ten UK employees are expecting some kind of bonus this year, of on average £14,600 each. Average bonuses expected by men are on average 132% more than those expected by women (£19,500 as opposed to £8,400).
The findings highlight that 22% of bonus recipients intend to deposit their money in a savings account, but Investec Private Bank is concerned that many of the rates on these accounts will not be competitive enough. Investec’s research reveals that of the 6.46 million people intend to put all or some of their bonus into a savings account, 93% will use existing savings
accounts. Only 3% said that they would open a new account based on shopping around for a best-buy rate. A staggering one in five said that they would leave their deposit in their main day-to-day bank account.
Linda McBain, head of Banking at Investec Private Bank said, “Competition in the savings market is intense at the moment, and rates of 6% or more are easy to come by. However, there are still many accounts offering derisory returns so it is very important to ensure that your savings are receiving a fair and competitive interest rate.”
The Investec High 5 Account, which currently pays 6.31% gross AER2 and requires a minimum investment of £25,000, pays the average of the top five best-buy accounts as chosen and published by the independent financial product research company Moneyfacts3. The rate is therefore independently calculated giving transparency, meaning clients never again need to shop around for the best rates.
In terms of how people intend to use their bonuses other than putting them into savings accounts,27% said that they would use it to go on a holiday and 22% said that they would use it to clear debts.