In the couple of weeks that have followed publication of Mr Turner’s letter (see box, right), Accountancy Age has received scores of letters from indignant accountants earning £25,000 to £30,000 a year and under.
And according to our most recent salary surveys, they are by no means in the minority.
As borne out by the most recent Accountancy Age/Robert Half Finance and Accounting salary survey, Turner correctly points out that an accountant’s average salary is £42,000, though their total package including benefits is nearer £50,000.
Many accountants are luckier, of course. More than 40% of the 1,148 respondents to last year’s poll said they enjoyed a total package of between £40,000 and £70,000. Nevertheless that ignores the 10% who earn less than £25,000 – even with benefits.
Martin Hawkins cheerily suspects he is the ‘lowest paid qualified accountant in the UK’. He told Accountancy Age last week that he earns just £15,000 a year. He would ‘happily take’ £25,000 but doubts whether his MD would be happy!
The total package of one in three UK accountants is between £25,000 and £40,000 a year – with many of those falling in the £25,000 to £30,000 bracket identified in the letter.
Of course the picture is not a uniform one nationwide. Only one in four London-based accountants earn between £25,000 and £40,000 (more earn between £40,000 and £55,000), compared to over 50% of their Scottish and Midlands-based colleagues.
In his letter, Turner wonders where accountants earning less than £30,000 work. Other Accountancy Age readers wasted no time in letting him know.
Responses came from as far as Perth in Scotland down to Devon. Interestingly, few came from the capital.
Doug Richardson said that paying less than £30,000 to a qualified accountant in the West Country is ‘the norm, not the exception’.
York-based Matthew Walker says most of the accountants he knows fall into the £25,000 to £30,000 bracket. A ‘quick look’ in the recruitment pages of any accountancy publication, he argues, will show that London and Edinburgh-based accountants earn more than those in ‘Leeds and Manchester’.
And one respondent told us a certain Big Four firm’s Hull office recently offered a salary package worth less than £15,000 to ACCA-qualified accountants.
Again, perhaps unsurprisingly, our postbag reveals public sector accountants are generally paid less than private sector counterparts.
Helen Ledger suggests that Turner has ‘never met or spoken to public sector accountants about their wages’. She admits she has yet to hit the ‘magic average income of £42,000’ despite qualifying in 1994.
Admitting to never earning more than £27,000 a year, one Scottish accountant in his ‘forties’ is offering to ‘relocate’ for £40,000 plus.
Roger Jones, meanwhile, tells us that many professionals have been driven into poorly-paid jobs due to unemployment and job shortages. He believes there are 700 qualified accountants out of work in Manchester and that most of the available jobs are in ‘shared service centres’, which are like ‘accounting processing factories with little or no job satisfaction’.
Perhaps the most interesting aspect of the responses was the number of Accountancy Age readers who say that they are happy earning less because there is more to life than cash. Derek Broom is a group accountant for a small district council on a salary of £31,000.
Living in a ‘beautiful part of the country’ and with an ‘excellent work/life balance’, he believes that ‘money isn’t everything’.
And there are gender differences – even in the 21st century. The average salary revealed by last year’s survey among male accountants was £44,035, while it showed that females earn £37,813 on average.
Eleanor Greene, for instance, believes she is part of the ‘hidden army’ of female accountants who value life over a job. She works for 20 hours a week, fitted around her social life, and is not prepared to return to ‘wage slavery.’
An updated Accountancy Age/ Robert Half Finance & Accounting salary survey will be published next month. It will be fascinating to see whether the gender gap has closed, as well as whether fewer accountants are ‘low paid’ compared to last year.
So who are the UK’s best-paid accountants? The highest earning FTSE-100 finance director is Man Group’s Peter Clarke, with a total package of £1,729,000, according to the 2002 FD salary survey undertaken by Accountancy Age’s sister title Financial Director. Vodafone’s Ken Hydon follows closely with earnings of £1,327,000, and GSK’s John Coombe brought in £1,326,000.
Senior partners of the Big Four firms aren’t doing too badly either.
Mike Rake earned £1,700,000 all in last year with Ernst & Young’s Nick Land trousering £1,042,000. They could well be dwarfed by Kieron Poynter’s later this year, however, once the largest of the firm’s – PricewaterhouseCoopers – reveals the pay of its top man.
Martin Hawkins has some catching up to do.
To join in the great salary debate, email email@example.com
THAT LETTER AND SOME OF THE RESPONSES …
I read from time to time in your magazine that the partners in the top firms enjoy annual profits in the region of half a million pounds.
I have also read in a recent issue that the average accountant’s income is £42,000 and so for these figures to be correct then it presumably follows that there are somewhere a large number of accountants whose income is only in the region of £25,000-£30,000. I just wonder where those accountants must be because I cannot imagine any qualified person having an income of only that figure.
I am part of the hidden army of female accountants who decided that life was worth more than work. I work about 20 hours a week, fitted around my children and my social life. I earn enough to pay for the gym and I shop when and where I like. Life is good. School holidays are relaxed.
Childcare bills are minimal. Maybe someday I will return to wage slavery and 48-hour weeks but not yet.
He must naive as many small companies can’t afford large salaries to even qualified accountants. Having been out of work recently, I found many companies looking for newly qualified and although I have been FCMA for over 15 years, and being over 50, the companies offering me even interviews were very few.
I work full-time just outside London where the cost of living is higher than in most places so why do I, a qualified accountant, work for such a pittance? I need a job and it is the free market that sets pay rates and job availability, not my institute. I have not always been low paid; as a graduate I qualified with a large London firm and have worked for five different commercial organisations. Maybe that provides another answer, 25 years’ post qualification experience. It seems employers prefer youth over experience so we mature accountants have to take what we can get.
Once forced to take a low paid job, we are trapped since it is difficult to obtain a higher paid job as your current level of pay is regarded as equating to your ability. But while I may be ‘low paid’ I am fortunate in that not only do I have a job, it is one I enjoy and I know many people can only dream of earning £25,000-£30,000. Everything is relative.
I am an ACCA-qualified accountant with three years PQE, hoping to obtain my practising certificate later this year. I work in a small public practice as an audit senior. My annual salary is £21,000. I suppose it is possible that I am the lowest paid qualified accountant in the UK, if not then I can only assume that there must be many more like me and even more like Mr Turner.
Name and address supplied
In my experience a large number of newly-qualified accountants are within that range, and because of the nature of the payscales, stay within that range for a while. I qualified in 1994 and have still not made it to the magic average income of £42,000. But before anyone irritatingly says that probably shows the lack of quality in the public sector, I consider some of the benefits help to lessen the impact of lower pay, such as a good pension (for which we get criticised) and not always having to work long hours. Having said all of that, a decent payrise would be appreciated.
Accountants in Edinburgh and London earn more than those in Leeds and Manchester, a quick look at the recruitment pages of any accountancy publication will show this. I suggest that Mr Turner looks at the national picture and does not make comparisons based only on his personal experience.
In the West Country, paying less than £30,000 p.a. to an accountant is the norm, not an exception. Probably the same is true of other extremities of the UK. I’m afraid David Turner’s comments are symptomatic of so many comfortably-off professional people who have no idea what goes on outside their little world.
Does he not read your magazine where such vacancies are advertised? Not all are for high salaries. Does he assume all vacancies cater for applicants who can command in excess of £30,000, particularly outside London? What about newly-qualified accountants with no real experience? Maybe he hasn’t heard of Pricewaterhouse-Coopers’ Hull salary package. They used to pay less than £15K for fully qualified ACCA.
In Manchester, there are more than 700 qualified accountants out of work and virtually no new employment, which is driving the pay down. The positions coming to the market seem to be in shared service centres where you are almost working in an accounting processing factories with little or no job satisfaction.
The fact is many people work for reasons beyond income: for job satisfaction, for personal growth, to give something back to a community. Others are juggling demands of family and need to work for a sympathetic employer that will not demand working all hours, and will accept work/life balance is important – the downside is usually the pay is lower. Wake up and smell the coffee, David.
Name and address supplied.