The average annual salary for an actuary has fallen by 5.8% since before the credit crunch, while the average UK worker has seen their annual pay increase by 11.4% over the same period, according to analysis published by Randstad this week.
The recruiter's figures, which are based on data from the Office for National Statistics, reveal that an actuaries' average annual salary has fallen by £2,487 since 2006 - down from £42,686 a year to £40,199.
Between 2006 and 2012, the average UK employee's annual salary increased from £23,554 to £26,244, but Randstad highlighted significant differences between how different occupations had fared.
Management consultants have seen their pay drop by the same percentage as actuaries since 2006, while insurance underwriters' annual pay has increase by just 0.4% and chartered accountants have only received a 1% pay increase.
Randstad contrasted this with managers in financial institutions, who have seen their pay rise by 20.2% over the same period, and metal forming and welding workers, who have seen their pay increase by 22%.
Mark Bull, chief executive for Randstad in the UK, said: 'Where fewer people train in a specific skill set and demand from companies is strong, salaries increase. When the converse is true pay just bumps along.'
Giving metal workers and chartered accountants as an example of the contrasting fortunes seen since 2006, he added: 'Most accountancy firms reduced their graduate intakes after the initial recession, and with lower demand, the general pay competition between firms seen previously suddenly stopped.
'In contrast, while the number of metal work trainees appears to have been reducing, major projects like the Olympic infrastructure and Crossrail has led to more competition among employers in a relatively small skills pool, and pay has risen accordingly.'
It also noted the widening percentage pay gap between the public and private sectors. Since 2006, average annual salaries in the public sector have risen by 15.9%, but the private sector has only seen a 10.2% increase.
Bull added: 'Whilst the private sector was hit harder by the global economic crisis and saw salary gains slide back rapidly, pay increases of public sector employees remained insulated for a longer time. But with more public sector cuts to come in this parliament, the pattern could easily reverse.
'It's also not just a simple story of public versus private remuneration. In every sector there are pockets of people whose skills have seen them in increased demand, driving their pay up at a different rate to others.'
The analysis notes that, despite the increase in salary for the average UK employee, workers would be worst off in real terms because inflation has outstripped pay by 7.9 percentage points. For the average annual pay packet to have kept track with the rising cost of living, it would have had to increase by 19.3% since 2006.
Comments:
I have always found the definition of an actuary quite ambiguous in these salary surveys. If it includes all actuarial students still taking exams, the standard deviation of that average must be huge, easily making the 2.5k change fall within the margin of error. I'm sure salary surveys split doctors' salaries from trainees' salaries, so I don't see why they can't do the same for actuaries - a similar survey for only fully qualified actuaries would be interesting to see.
Anonymous
This article implies that a reduction in the average means that the average person has experienced a reduction, but that's not necessarily true. For example, the profession expands with new graduates every year, in numbers far exceeding the number of senior actuaries retiring. That will reduce the average but clearly it's positive news for the profession.
Scott Manson, Scottish Life
Did an Actuary revew this study? As a profession that places lots of importance on the clear explanation of the analysis of statistics, I think it's poor form to go for the shocking headline of "fallen by 5.8% since 2006", when this fall is highly unlikely for "the average actuary" and might better be explained by the rising no. of students who are paid less. This also begs the question of why a report from Randstad was used in the first place, if they can't differentiate between the two!
Anonymous
I echo the comments above, and given the average salary quoted it must include trainees since I would imagine 95% of qualifieds earn above that. I'd even go far to say that this article shouldn't have been reproduced in The Actuary, without any editorial comment, and certainly not as the lead article in the email newsletter.
Anonymous
It astounds me that the "magazine of the actuarial profession" would publish and headline on such story that is clearly not very helpful to it's members and based on some dubious statistical analysis - If you can find me an actuary at £40k - then please let me know!
Brian Purves, Partner PwC
Well i guess that should save as an eye opener to the profession. supply is far exceeding demand. when was still at high school ( about 5 years ago,) actuaries in Africa esp South Africa were hot on demand. Now as a student its really so hard to get that " super hero" feeling whenever you apply for a job, 2 Most companies who need actuaries probably dont know the value of an actuary, i remember one HR of a financial services company asking me " so what does an an actuary really do"
Anonymous
I agree with many of the comments referring to the qualified/student mix included amongst the respondents. I would go further and look to investigate if there are a rising number of new entrants to the profession resulting from efforts over recent years to expand the scope and number of actuaries. If so, then I would expect the weighting, even within the range of fully qualified actuaries, to have changed with a greater weighting on newly qualified actuaries at relatively lower rates of pay.
Maurice Brandman
Such analysis sounds grotesque and absurd and particularly, not in line with the perceived reality which suggests otherwise, especially with the advent of Solvency 2, implementation of IFRS 4 and MCEV recently. In addition to the common explanation put forward (ie change in mix of new entrants to qualified actuarie), I believe that the relaunching of the Associateship class go a long way towards explaining the variation in the salary survey.
Ashley Moheeput, Qualified Actuary, FIA, Major insurer, UAE
