London Analyst Comp - 75% lost to Taxes, Expenses & Rent *UPDATED*
A Friend sent me this who lives in the UK who’s in finance
Is this estimate real?
London Analyst Salary £85,000-£90,000 Bonus £42,000-£63,000
Let’s take low Comp Estimates 85 Base and 42 Bonus (50%)
£85,000 Salary - £26,651 Taxable Income =£58,349
£42,000 Bonus - £22,761 Bonus Tax =£19,239
After Tax = £77,588
Expenses: * £2500 rent monthly / Annually £30,000 * £370 Utilities (Electricity, Heating, cooling, water, Data plan, wi-fi) * £267 Monthy Train Ticket Zone 1-5 * £47 Gym Membership * £300 Groceries / £10 Daily * £85 Health Insurance * £12 Rent Insurance = £1081 / Monthly (without rent) £12,971 Annually + £30,000 rent
= £42,971 + £2500 Council Tax = £45,471
Remaining left over = £32,117
Thats pretty good, 41,500 pounds left over to save at 21 is just huge.
Dubai - (On-Par with NY Compensation)
Base $100,000 Bonus $70,000
Rent Dubai Marina $1,600 ($19,200) Utilities $300 ($3,600) Health Insurance $2,600 Wi-fi $80 $960 Gym $80 (Business District) ($960) Rent Insurance $680 (Mandatory) annual (no car)
$28,000 Total Expenses
17% of Earnings Lost, 83% Kept (with car)
Honda Civic $19,000 (Used, 60,000 KM) $47,000 Total Expenses 28% of Earnings lost, 72% of Earnings Kept
True, but London is probably the best city in the world to live in. Miles better than Dubai.
Is a car a necessity if you live in dubai (like to move around) even if you're living in Dubai Marina, which I presume to be located in the heart of the business district
But you also live in Dubai. My friend at EY in UAE was offered 3 times to do a 6 month assignment in Afghanistan back in 2017. He didn’t go lol but by your logo Should have
That budget does not include funding a retirement account or better yet, any discretionary items.
Euro Poor
Sorry, who told you to expect a 70k bonus? A 100% bonus...
it’s 70% of the Base. Range for bonus is anywhere from 50-70% of base. Usually Base in Dubai is anywhere from 90-110k (including housing allowance)
Yeah banks depending on firm can be as low as 20% as high as 80 on great years but never heard of 100
Are you serious? You're arguing with me about the numbers after you just changed the numbers? What the fuck is wrong with you????
You wrote £70k base. I said 100% bonus in this market is not happening. Now you've come back to try and make me look stupid and say "UHHH AKSHUALLY 70%" after you edited your post. How about you fuck off?
Praying for your downfall and that you never get into finance.
I fail to understand who spends 2500 pounds a month on rent (fucking absurd if you're 21) and still somehow lives in Zone 5 so they need to get tickets to zone 1?? You also left out council tax and your bonus will never be 100% so pretty inaccurate all around from both earning and spending side
So Base can be anywhere from £85,000-£90,000
Bonus can be 50-70% (£42,000- £63,000)
Usually you have to be in Zone 1 to do Investment Banking in London so Rent of £2500 is pretty low, many people go above and beyond to £2,800-£3,000
For a Council Taxes, it’s paid annually. So most IB A1s-A3s will fall in band £88,000-£120,000 or £160,000-£320,000 both either paying £2,500 or £2,900
The Zone 1-5 Ticket is chosen because people have families, friends, etc all over London. London is mostly international, so if you’re a local it probably doesn’t matter.
Rent is too high even for zone 1. Don't know any analysts paying more than c.2k for rent regardless of zone. Council tax seems high too, £120-160 monthly feels more market
No way. If your office is Canary Wharf you can find a 1 bed in Isle of Dogs for 1800 or a 2 bed in London Bridge for 3000. If your office is in the city you can live in a 2 bed in angel for 3000. Might be slightly more difficult if you want to live close to your mayfair EB but I’m not buying this lol.
If you are living alone in a 1-bed in zone 1/2 and want a somewhat decent apartment, I would say that £2.5k is not unreasonable. You could probably get a decent 1-bed in zone 2 for £1500-2000 if your standards aren't super high though
You can get a big 1 bed in zone 2 for 1500 if you don’t want to share. Plenty of nice new builds out there if you’re not looking for zone 1
85k base as An1 in London.. your friend is full of shit or he's MFPE analyst and doesn't need to worry about this.
So what’s the going market rate Base and Bonus ?
Who tf spends 2.5k in rent as an analyst? I make multiples of this goon and don’t spend that
also what’s up with that tube card to the far end of the world?
This is a load of fucking bollocks mate.
£85k base? No more like 70.
£2500 council tax? Maybe in the most expensive councils and even then you get a single person discount which would take it to 66% of this value. My council tax is like £1600 a year total and I'm in a middle of the pack borough. For a single person it would be like 1100.
£367 on utilities??? We spend less than that in a 3 bed apartment TOTAL.
A Zone 1-5 Railcard while spending £2500 on rent is insane behaviour? Like dude a pick a fucking struggle. Either live in the very center of London (£2500 rent) or live in zone 5 and get cheaper rent. Besides getting a Railcard is stupid if you work in IB since you're not going to take enough tubes probably to make it worth it, since you'll be ubering home.
This is clearly another one of these people who has a hard-on for hating London and so exaggerated these numbers to infinity.
If base is 70, what’s the bonus figure like?
Beats me, we're yet to have a "normal" year on the new bases. So far every year since they raised bases has been in this shit no-deal market.
Conservatively I'd estimate 100-110k TC.
Zone 1-5 tube card + 2500 rent is where this became unbelievable.
Base is 70 for most banks. Assuming 110k total comp, you would have about 70k after tax. Utilities are a bit high (would rather be around £100-150 for a 1-person household). Train ticket is a bit high as you most likely would be living in zone 1/2 if you're in banking. Council tax also seems a bit high.
Let's assume 70k total comp after taxes and cut your expenses from 45k to 40k a year. That leaves you with 30k in savings. However, this doesn't consider all of the other stuff that you will be buying such as clothes, restaurant visits, entertainment, drinks, clubbing, travelling etc. Depending on how expensive habits you have, your savings would likely be in the £10-25k range.
Saving that amount is not bad at a young age. However, London is an extremely expensive city to live in compared to the rest of Europe so you won't be saving up to become rich anytime soon. If you're lucky and save quite a bit, you might be able to afford getting your own apartment by the time you make VP. Compare this to banking in other major European cities, where a lot of people are able to save €60k+ during their first year.
who tf spends 2.5k for an apartment at 21? take a single room for 600-900 and the rest goes to savings
Why are you crying? A 21 year old has 30k left over to save at the end of the year lol.
No, this was just an estimate. Comp + Bonus in this market is 100-110k effectively leaving you with 10-15k in your account which is fuck all
So is your gripe that banking but doesn’t pay 21 year olds more money? Or that london is expensive and it sucks living there if you’re family isn’t successful and can’t help you get started? Or that life is unfair? I’m just confused at what is upsetting you.
Title should read: "analysis of the London comp landscape from someone who has never set foot in London"
These numbers seem a bit too high, don't they? 85k base and 63k bonus?
Let’s not forget that London is one of the most expensive cities in the world and comes with free education and healthcare - two significant expenses that one doesn’t need to budget for. Their quality and current status is a different discussion.
That means salaries are automatically adjusted so that they don’t need to cover for these two things, which is why compensation seems lower. Taxes are also definitely high because of the above. Further, deal activity in North America is much higher than in London. I think people in U.K. in general are slightly more conservative in their spending habits than Americans, so even that needs to be taken into account.
Once you hit £150-£200k in total compensation, there’s definitely more savings. Don’t think it’s fair comparing absolute numbers as such.
the UK actually doesn't offer free education. It's still better than the US but there are lots of countries which really offer free education like Sweden for example where you don't pay anything for your studies at any level. In the UK you can get a government loan which fully covers the fees at the undergrad level, but you repay it to some extent anyway, soooo it is not free
Is it possible for an international student, coming in as a masters student at LSE to get into IB ?
2 important elements missing from this.
1. Retirement savings, in UK most banks give you 8-10% direct contribution as opposed to 401k match in US.
2. Int’l taxation: US citizens get zero value from going to Dubai vs. London since your netted up to US tax rates (unless you’ve been in Europe for a decade and have material carrybacks). A lot of Europeans/Canadians/Aussies go there for a few years to just rake in their 20s since taxes are so low, but not a great place for family unless your 2nd-generation/startup liquidity event wealthy.
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