Actuarial salaries have declined

Actuarial salaries have declined. Key figures from IFoA financial statements are shown for comparison.

Average UK salaries according to IFoA website using XpertHR salary survey:

Date: Actuary / Student Actuary / Recent Graduate
2015: £52,067 / £36,241 / £33,130
2018: £51,594 / £35,936 / £32,825 (-1%)

Subscription rates: Fellow / Student
2015: £700 / £235
2018: £730 (+4.3%) / £241 (+2.6%)

Exam fees: CT, CA1, ST, SA
2015: £215, £575, £295, £295
2018: £225 (+4.7%), £610 (+6.1%), £315 (+6.8%), £315 (+6.8%)

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Remuneration of IFoA Chief Executive Mr Derek Cribb from Financial Statements:
2015: £337k
2018: £389k (+15.4%)

IFoA staff costs:
2015: 155 staff at £9.0m
2018: 165 staff at £10.7m (+18.8%)

Overall surplus/losses:
2015: Loss of £1.7m
2018: Loss of £0.7m

Net assets:
2015: £15.9m
2018: £12.7m (-20.1%)

 

Very interesting statistics.

 

Just because Actuary salaries may be declining in the UK (which I find very hard to believe), doesn't mean they are declining elsewhere, and the IFoA are an international body.

 

You don't get paid for an "FIA" outside of the UK. Anywhere in Europe for example and FIA is banchmarked to a local wage in a given Economy and earns the same salary as a locally qualified actuary. The UK qualifications are "worth the most" in the UK.

 

The UK Qualification is used in Ireland for instance, you have to be a member of the institute to do the exams and qualify, and hence there is no such thing as a locally qualified actuary. look at any salary surveys in Ireland and you can see student actuaries earning up to €70k+. Hence I find it hard that qualified actuaries in the UK are earning on average £51k

If there are places were the salary is £51k, then you have to assume the cost of living in those places is low, hence it balances itself out. A quick google shows the average salary on an actuary in London is almost £70k, and so the demographics of the survey above are equally as important as the results.

 

I'm outside of London and your average actuary salary is around the starting salary for a just qualified actuary here. As Ace says, way higher in London.

 

Who the participants of the survey are and whether that accurately reflects salaries in the UK is not the point- IFoA clearly rely on this survey and it shows a decline since 2015.

 

How many people took part in the survey, and in each bracket?
Are these people working in the UK or elsewhere, are they based in London or Burnley?
Do the same people take the surveys over the years - have numbers dropped?
Why do you only include the bottom 3 categories - why not include all bracket points?

The salaries quoted are the basic salaries - but of course you decided to leave this important word out, for instance I'm aware of many actuaries whose have a base salary and then a car allowance on top - which is used to prop up their salaries, but is not included in basic salaries as outlined in this survey.

 

almost_there did not make up the numbers to illustrate the trend.....I find it interesting that the salaries are decreasing but fees are increasing....nothing to do with liking or disliking the profession.

 

But again, the fees are going up in Ireland, but the Salaries are going through the roof.

You link salaries of a profession against the fees, but you are looking at fees that are used outside of UK, but salaries only based in UK - it's like comparing apples and oranges - it's not consistent.

 

Yes it is consistent, these are the fees charged in the UK.

 

Chief Actuary & Department holder have suffered even bigger declines in their salaries. Chief actuary £220k down to £200k, Department function holder £140k down to £135 in the last 3 years.

 

I think they'll survive.

 

Comparing 2009 salaries with 2018, using the same survey:

Responsibility level 2009 2018 %change
Chief actuary, senior partner £184,034 £206,236 12%
Senior function head, practice director £120,814 £135,192 12%
Function head, practice head £108,861 £116,676 7%
Department manager, managing consultant £89,141 £95,053 7%
Section manager, senior consultant £74,617 £83,713 12%
Section leader, consultant £64,931 £73,103 13%
Senior actuary, junior consultant £53,041 £66,066 25%
Actuary £43,930 £51,594 17%
Student actuary £31,303 £35,936 15%

CPI 2018 / 2009 = 30% higher.
At all levels actuarial salaries have not kept pace with inflation.

Meanwhile Derek Cribb was on £267k in 2012/13 so is up 45% since then as he's now costing IFoA £389k, when inflation since then just 15% higher.
No of staff at IFoA up from 116 in 2012 at £8m to £10.6m in 2018 for 165 staff.

Back in 2001-03, the Institute used to say a newly qualified actuary could earn from £33k. Today it's more like from £44k according to one salary survey in the Actuary magazine this month. Just 33% up in 17 years when inflation up 61%; should be from £53k today if kept up with inflation.

 

I can confirm that actuary salaries are not on the up. Look at the membership statistics. There are many more younger actuaries than older ones so unless the younger ones start to be culled by the Ifoa they’re just going to be stuck in their same jobs and not see any progression to more senior roles. I have worked for a large insurance company (and not the Ifoa) so I can confirm that the actuarial profession is not a growing profession but rather a saturated and declining one. An actuary is not a highly paid and lucrative job. Excessive qualification times are a waste on company resources and this is why actuarial salaries are not what they used to be. They might be slightly higher because of inflation but they do not compare to the rest of the market. You’re better off with a PhD in machine learning or some other technical field. I would not reccomend that any new graduate joins this “profession”

 

Despite what some people seem to think, I don't think average salaries have kept up with inflation either - but they haven't in many jobs.

Would be interesting to see the impact of certain events though - eg pensions review around 1999-2005 (not sure of dates) when many actuaries jumped to contracting and made plenty (arguably not particularly equitably); creating extra demand which could have become surplus when the work died down. SII and the growing GI world probably picked up the slack for many years but perhaps we've reached the end of that period and it's now the surplus has arisen.

 

Yes agreed there was a huge amount of work required for SII and the pensions review. Lots of actuaries had lots of work to do which now seems to have come to an end and they are all sitting around and twiddling their thumbs. The Morris review made recommendations and the IFoA has not been following them for years. So, you agree with me that new students should perhaps look to other professions unless they’re dying to become an actuary?

 

I'm not a careers adviser, and I don't know enough about all the other alternatives to recommend anything. I'm sure individuals can do their own research; ask lots of people questions; and make a decision that's right for them. And it's so common for people to switch careers these days that it's not the end of the world if they change their mind later on.

 

Changing careers is an issue if you’ve invested over a decade in a qualification

 

I'd argue that IFoA policies such as CAct will cause further declines in actuarial salaries. The situation would be worse had Derek Cribb had his way in wanting actuaries on the shortage occupation list, meaning UK employers wouldn't have to bother looking for UK actuaries for UK jobs in the first instance, so it would have unnecessarily created more supply and lowered salaries further.

 

What's driving the salaries down or just keeping them from rising is the fact that the companies manage to recruit students/ actuaries for those rates. Mainly, I would say that the supply comes from various countries in Asia, Africa and less developed markets in Europe. When coming to the UK for an actuarial role, it is really difficult to understand what " the right" salary should be or how much do you really need to earn to live comfortable in places like London. Companies can get away with a less attractive offer and still manage to find suitable candidates.