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The mystery of the missing jobs in UK banking and finance

by William Wright

December 2022

UK capital markets

Something funny seems to be going on with the banking and finance industry: the number of jobs in the UK economy is shrinking.

Something funny seems to be going on with the banking and finance industry: the number of jobs in the ‘jewel in the crown’ of the UK economy is shrinking. As the industry prepares for ‘Big Bang 2.0’ the number of people employed by the industry has fallen to its lowest level since shortly after Big Bang 1.0 more than 35 years ago.


New Financial is a social enterprise that relies on support from the industry to fund its work. To request a copy of the paper, please click here.


In June 2022, the financial services industry employed 1.068 million people in the UK, according to the latest available data from the ONS. That’s a lot of people - just under 3% of the total UK workforce - but it’s the lowest level since September 1987. The number of jobs in the industry has been falling for the past three years and the rate of decline appears to be accelerating.


The industry employs 76,000 fewer people today than as recently as September 2019; 61,000 fewer than when the UK left the EU at the end of 2020; and 51,000 fewer than in June 2016 when the UK voted for Brexit (a decline of between 4.5% and 6.6% depending on which period you choose). This wasn’t supposed to happen to one of the UK’s most successful and important sectors after Brexit.


On our calculations, if employment in financial services had kept up with the growth in jobs in the rest of the economy over these time periods, there would be something like 85,000 to 105,000 more people working in the industry today than there actually are. So, what’s going on? And where have these jobs gone?


The global financial services industry has had a bruising few years, but this effect is not happening in most other comparable markets. Employment in banking and finance has grown over the past six years in the US, Canada, Australia, France, Switzerland, and Japan, although it has shrunk in Germany and Italy.


There is no single reason why the number of jobs in financial services in the UK has been falling for the past few years, but we think there are a number of interconnected factors at work: the direct impact of Brexit in terms of relocations; reduced inward investment in financial services over the past few years; more firms ‘off-shoring’ support staff to cheaper markets such as Poland; advances in IT, systems, and productivity; retail banking branch closures and the shift to online / app-based finance; and the success of UK fintech (successful fintech companies destroy jobs in traditional finance).


We don’t know the answers but we’ve written short paper outlining the facts. To request a copy of the paper please contact us on info@newfinancial.org and please let us know your thoughts on what is going on and what we may have missed in the comments below.

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