As a base note, we will start by mentioning that the average UK salary is £27.271 a year (£39,476 in London).
How does an accountants' salary measure up?
Well, it's hard to say since the term accountant is so vague and could include so many different job titles.
According to available data, accountants in the UK earn anywhere between £28,630 to £400,000 a year, depending on qualifications, industry, company size and sadly also depending on gender.
It will also depend on the kind of accounting job you wish to do: public accounting, finance accounting, general accounting, corporate accounting and so on.
The accounting sector seems to be above the national average (18.4%) when it comes to the disparity in salaries between men and women. In practice accountancy, the variation is about 19.2% or roughly £10,000 a year. In the industry sector, the gap increases to 24.4% resulting in a difference of more than £16,000.
Despite women taking home a lot less than their male counterparts, surveys have found that female accountants were more likely to hold a professional accounting qualification. So make sure to know how much the position you're interviewing for should be paid and do not sell yourself short.
If you just received the very prized title of Chartered Accountant, you will almost certainly already have a few years of work experience behind you. However, you might be tempted to get an accounting job in another industry or apply to another company. Let's look at different accountant jobs and their salary range expectations.
Why Do We Need Accountants?
Many of us hold rather simplistic views of professions we’re not familiar with.
For instance, some people contend that, when they post a letter, their letter carrier takes it directly to its intended recipient – wherever s/he may be, with no idea of the complex systems and the technology involved in sorting and delivering mail.
The same is true for every job from banker to porter. It’s natural to assume that the publicly visible part of such jobs is all that there is to it. This attitude is reflected in the perennial question “How hard can it be?”
Thus it comes as no surprise that people are taken aback by accountants’ scope of work.
At the entry level, accountants ‘maintain the books’. In other words, they are the Bob Cratchits of the accounting world, poring over ledgers and making entries as needed.
That’s pretty much where the public vision of accounting begins and ends.
Of course, physical ledgers are quite nearly a thing of the past; these days, computer software is the overwhelming choice for accountants of all stripes.
Unlike in the Cratchit days when Scrooge was THE powerbroker of the town, virtually every business today incorporates international aspects, from buying raw goods to exporting finished products for sale.
That means that, as opposed to a limited concern easily maintained and tracked in a single ledger of credits and debits, these complex enterprises demand fiscal forecasts and projections, risk analysis and reconciliation.
Those functions require highly trained, competent people who are steeped in the economic climate of the times, who can put their strong analytical skills to use to determine how their firm can best weather any global or local financial storm.
What about calculating duties, tariffs and taxes, another aspect of modern accounting that Bob Cratchit didn’t have to deal with? That too is strictly the purview of accountants.
So, the titles and types of accountants featured in this article delve much deeper into the fiscal well-being of a company, city, country and the world than the common idea portrays.
Now we'll take a closer look at specific jobs in the accounting field, along with the education and certification required and the salaries for each.
Accounting technicians are often entry-level positions that you can access either through the AAT Accounting Qualification or the ACCA Certified Accounting Technician qualification (CAT).
The job mainly involves traditional bookkeeper duties, processing invoices, recording payments and receipts, making sure that ledgers are balanced and submitting tax and VAT returns as well as National Insurance contributions. Accounting technician can also handle a corporation's expenses and payroll systems.
Most of the work is computerised these days, and this job is pretty much desk-bound unless you are self-employed - say, as a CPA, in which case you are more likely to travel from client to client.
A more senior Accounting Technician can also take on budgeting, reporting, tax returns preparation or become an assistant controller.
Salary-wise, you can expect your wages to fall between £16,000 and £22,000 while training to get your certification. Once you're qualified and your degree is framed and pinned on the wall, expect to make £30,000 or more depending on your you experience, industry and responsibilities.
You may further supplement you income by working as a CPA and also by being an finance tutor...
One step above Accounting Technicians, the chartered certification will open many more doors and will give a bump to your paycheck.
Chartered Accountants are more focused on consultancy and auditing. As well as managing money systems and budgets, Chartered Accountants are also required to complete internal audits or work with a certified internal auditor to assess the financial health of a company. Following such inspections, they often advise clients on tax planning, potential business transactions including mergers and acquisition or dealing with a company's bankruptcy.
Chartered Accountants often specialise in management accounting and can oversee the work of an entire accounting department. They would also be in charge of every internal auditor on the payroll.
In the beginning, income remain pretty low even for Chartered Accountant, but after two to four years, following your qualification, it will be time to renegotiate. At that point, the average Chartered Accountant can expect around £56,000 (including bonus).
After five years of experience, a Senior Accountant average salary goes up to £90,200 with an additional bonus of around £20,600 with variations depending on which accounting firm is hiring you.
If you prefer a more consultancy based career, accountants can also become financial advisers. Their job is to provide clients with specialist advice on how to manage and "grow" their money.
This job can vary and is often divided into two categories:
- Independent Financial Advisers (IFAs), who research and consider all retail investment products and supplier available to meet their clients' needs. They must remain unbias and offer unrestricted advice.
- Restricted Advisers are limited to a particular niche or range of product or providers.
In both cases, as a Financial Adviser, you will have to manage a client list and set up meetings. Your role will also include reviewing your client's financial situation and advise them according to the risk analysis that you would have completed.
You will also have to design financial strategies according to the results of your market research and adapt in function of a client change of circumstance or need.
Salary wise, at entry-level, expect to earn between £22,000 and £30,000 a year. With a degree qualification, you could pocket up to £45,000, and after years of experience and a promotion to a Senior Financial Adviser position, you could make around £60,000 a year. If you work as a Wealth Manager for a private bank or major retail division, it is pretty standard to rake in above £100,000.
The Vital Role that Accountants Play
Despite what you’ve read so far, it’s possible that you still believe accounting is fundamentally adding to the credits column of a balance sheet and subtracting from the debits column.
In the most basic sense, that is true. Accounting is simply a matter of arithmetic but that misses the greater point.
Let’s talk about the role that accountants play in local, corporate, national and international economics.
These days in the UK, many people buy on credit, paying later for something purchased today, effectively making the monetary transaction happen after long the exchange of goods and often with interest.
If you’ve ever handled such an exchange, you might easily believe that that is how accounting works: that accountants manage the fiscal results of the previously-conducted, actual trade.
That is an exceedingly limited view of accounting, to say the least.
Picture yourself at the bank, seated in front of a loan officer who has just told you that the bank cannot advance you any money based on certain criteria.
In effect, that official is acting as your private accountant at that moment, counselling you against a move that may badly affect you because of other factors in your life such as income and future earning potential; even the economic profile of city or town you live in.
In business, accountants fulfil the same role, advising a concern’s department heads and leaders of corporations which expenditures and risks they can afford to make/take based on current conditions and projections. They also forecast how a transaction will affect the corporation’s bottom line over time, sometimes years into the future.
The same thing happens at the government level, locally, nationally and between nations.
That aspect of the accountant’s work lies in direct contrast to the stereotype of accountants all being boring, pencil-pushing, number-crunching bean counters that seems to persist still today, doesn’t it?
Indeed, with the explosion of global trade and finance, accounting is more exciting than ever. Now, add technology into that mix and you have the makings of a role in finance to rival Indiana Jones!
Do you think we’re kidding?
Further in this article, we talk about the role forensic accountants play in cybercrime and international economics. Read on!
In the banking industry, an Investment Analyst is crucial to help traders, wealth managers and stockbrokers to make the right decisions about possible investments.
Their work with banks, corporations, hedge funds, life insurance companies or pension funds as well as wealthy individuals consists in providing insight into economic trends and evaluate the potential returns of various investments.
This job primarily consists of analysing data from different sources and identifying trends to make informed recommendations to your clients or managers.
It will require you to assess performance results including profit and loss, balance sheet and cash flow statements and you will have to keep up to date with market developments, new products and movements in relevant country's economy.
It also requires you to stay on top of world news, as war, natural disasters or political tensions can affect the fluctuations of a corporation's stock.
Most UK investment analysts are based in London, where they usually earn between £28,000 and £40,000 a year to start with. During their first three years on the job, Investment Analysts can expect to get a yearly bonus ranging from 10 to 100% of their actual salary.
With five to eight years experience you could expect to earn between £65,000 and £100,000 a year as a Senior Financial Analyst with a bonus between 40 and 150% of your salary.
At Senior level, salary reach over £110,000 and typical bonus are up to 200% of your salary.
In spite of their heavy workload, accountancy tutors London still make time to give lessons in accounting!
Working directly with Investment Advisers, a Financial Trader is in charge of selling or buying shares, bonds and assets for investors.
Responsibilities for such a position includes executing trades according to client's orders, informing your clients of market movements and possible investment opportunities or gathering information about companies' valuation.
Most Traders work long hours to be able to follow the market or their niche product, and this kind of work is usually demanding as trading on international market can be hectic, and the stress of managing large amounts of money can somehow be stressful.
However, the strains of this career are largely compensated by the salary a Financial Trader can expect to earn.
At the beginning of your career, you could be earning between £26,000 and £32,000, not including commissions (which can add up quickly).
Experience traders can make between £45,000 and £150,000 a month depending on your employer or the type of market your trade on.
If you reach the level of Associate Trader working in a top-tier bank, you could earn around £140,000 and if you specialise in a more lucrative niche market, traders making around £230,000 a year are the norm.
You may need an accounting online tutor to master all of the concepts required for this position...
Chief Financial Officers
This job is one of the highest ranking positions in a business's hierarchy, and as a CFO you will be the senior assistant to the Chief Executive Officer (CEO).
Your job is to oversee all of the enterprise's finances and operation to ensure that the treasury, economic strategy and forecasting are all respected and that your firm is on track to meet its yearly money targets.
You will also have to report to key shareholders, usually represented at the corporation's board, about what is going on regarding the overall financial position.
CFO's are crucial to the success of any concern, in maintaining its fiscal health, identifying potential threats, ensure compliance with all current regulations and finding ways to increase profits.
Salary wise, the national average for CFOs in the UK is around £115,000, but given the seniority of such a position, it takes years of experience and dedication before reaching such a job.
In London, this average goes up to £128,000, but some famous British companies pay their CFOs much more than that:
- Wire and Plastic Products - WPP, the biggest public relation company in the world, based in London. The company's CFO, Sir Martin Powell, makes more £48 million a year.
- Reckitt Benckiser Group, a consumer good company owning brands such as Dettol, Strepsils and Airborne, pays it CFO, Rakesh Kapoor, £14.6 million a year.
- The RELX Grup, an information and analytics company based in London, has been paying its CFO, Erik Engstrom, £10.6 million a year.
Whatever the career path you choose to follow, auditor, accounting manager, public accountant, tax accountant or financial manager, a degree in accounting will open many doors.
Recent surveys indicate it is an excellent tool for entrepreneurs to make sure they succeed in their business endeavours, but it is also a prized profession in the banking industry and the consultancy sector.
It is also the safest job in the world, both in term of job security and physical safety.
If you are a CPA or chartered accountant, it might worth looking at current vacant positions in major accounting firms such as Deloitte, Ernst Young, Robert Half International or PWC.
Those are great firms to learn the skills needed to take on more challenging positions in the world of money management.
Who could forget the WannaCry ransomware virus that struck Windows computer systems, locking entire civic structures like the NHS and government offices out of their systems until a ransom was paid?
Fortunately – or unfortunately, depending on how you look at it, cybersecurity agencies the world over were already on high alert for such attacks; they had happened before, although admittedly not as dramatic, severe or impactful as this one.
Furthermore, and this is the really lucky part, this particular computer virus was quickly contained and ultimately defeated before much ransom had been paid.
Of course, full credit goes to those on the tech side who had devised an ingenious trap into which those malicious worms fell. Other attacks have been more successful though, causing millions of dollars to be stolen or paid out.
That’s where forensic accountants come in.
A forensic accountant ‘follows the money’ of any shady transaction or dirty deed. Of course, not every case forensic accountants solve involves international intrigue; a substantial portion of them involve embezzlement and fraud at the local level – say, in a company or bank.
A critical distinction of forensic accounting is that it provides financial details suitable for testimony in a court of law. Forensic accountants are often called on to give testimony in court of the cases they’ve investigated.
To do that, these accountants must be well-versed in business and criminal law. As they are called to give testimony, they must also be able to prepare materials – charts, graphs and other documents relevant to the case.
A forensic accountant may work with insurance companies, branches of government, banks and the police. They have a keen eye for irregularity. They can spot when something is not quite right and trace that blip to find potentially criminal activity.
A forensic accounting position generally requires a chartered accountant certification. Furthermore, many forensic accountants round out their education with training in alternative dispute resolution because they work so closely with the courts and law enforcement.
Indeed lists the average salary for a forensic accountant in the UK as £48,000 while a Glassdoor survey reports it to be just under £55,000 per year.
In Summary: Do Accountants Make Good Money?
No, they make money good.
If that’s not already an accountant joke, it should be!
All jokes aside, living in the UK is expensive. According to Expatistan, the cost of living in our country is 72% higher than in western Europe. The site also notes that life in the UK is more expensive than 86% of the world’s countries.
Those are pretty sobering statistics, underscored by the fact that a family of four could only just get by on £45,000 per year, depending on where in the country they live.
Contrast that needed annual income with the average of £27.271 annual salary mentioned at the start of this article and it’s clear to see that an accountant's pay hardly covers the cost of living in the UK.
Admittedly, the starting salary for an entry-level accountant will not cover basic living expenses. By contrast, the experienced chartered accountant’s annual wage exceeds that £45.000 benchmark by more than £10.000, which could make for a pretty comfortable life, especially if you factor in possible bonuses.
As with every profession, experience and education matter. You can’t do much about your level of experience except to get it – most likely in a lower-wage position, but you can certainly control how much education you take in.
The more the better, obviously, but your studies should be in line with the type of accounting you wish to practise.
The Difference Between Earnings and Earning Power
Throughout this article, we’ve listed both entry-level and upper-level salaries for various types of accountants.
If you only consider the baseline salary, you would have to conclude that accountants are poorly compensated, especially in light of the fact that most starting positions don’t pay enough to live comfortably in our country.
That is why, when considering your future as an accountant from the earnings perspective, you need to focus on the potential rather than actual earnings – on your earning power versus what you will actually take home, which stands to be substantially higher.
Another factor to consider that we touched on earlier is job security. Accountants are not likely to be let go in a sudden economic downturn or when the business they’re working for faces challenging times. Indeed, your brand of expertise makes you invaluable to your company!
Finally, consider the idea of starting your own firm or practice. Relatively few career fields permit the flexibility of a sufficiently experienced employee striking out on their own. As an added incentive, government loans and grants may help you get started as an independent CPA and eliminate the stress of worrying about making enough money to get your business off the ground.
All of these factors and more contribute to your potential income as an accountant and add value to the wages you earn, making a career in accounting very tantalising indeed!