Barclays bonus pool jumps 30% amid calls for UK bank tax 2026

Barclays has increased its banker bonus pool by nearly 30% after a strong rise in second-quarter profits, fueling calls for a tax on UK lenders. The bank allocated £1.3bn towards its bonus pool for the first half of 2023, up from £1bn last year, according to fresh corporate filings. This surge in compensation reserves comes as pre-tax profits for Q2 reached £3.3bn—a 31% year-over-year increase—bringing half-year profits to £6.1bn.

Barclays also announced a £1bn share buy-back and £800m in dividends for shareholders. However, the windfall has reignited debate over banking sector taxes, with the Trades Union Congress (TUC) urging the government to impose a higher bank surcharge to help fund cost-of-living relief. TUC General Secretary Paul Nowak stated: “Big banks like Barclays are raking it in while working people struggle. High interest rates have been a boon for banks but misery for everyone else. It’s time to increase the bank surcharge.”

Why Barclays’ bonus pool matters

Banker bonuses are a sensitive issue in the UK, especially as households face rising mortgage costs and energy bills. The £1.3bn bonus pool will accumulate through the second half of the year, leading to potentially larger payouts for top performers by February. Critics argue that such generous bonuses are out of step with the broader economic pain caused by higher interest rates.

Comparison: Barclays bonus pool vs. UK household debt

Key takeaways from the Barclays bonus news

• Bonus pool increase of 30% reflects strong profit growth from higher interest rates.
• TUC and other groups call for a bank tax hike to fund social programs.
• Barclays also returned £1.8bn to shareholders via buybacks and dividends.
• Final bonus decisions are expected by February 2024.

FAQ

Barclays’ results come amid a broader trend of UK banks reporting robust earnings due to the Bank of England’s rate hikes. However, the political pressure is mounting. As the new prime minister and chancellor consider their next moves, the debate over taxing bank profits vs. maintaining competitiveness will intensify.

In summary, the Barclays bonus pool increase is a flashpoint in the ongoing discussion about fairness in the financial sector. Whether higher taxes materialize depends on the government’s appetite for populist measures and the resilience of the economy.