Financial services in the United Kingdom contributed a gross value of £86 billion to the UK economy in 2004. It creates significant benefits for the UK, European and global economies. The industry employed around 1.2 million people in the third quarter of 2012 (around 4% of the British workforce). The estimated amount of total taxes paid by the Financial Services Sector in the year to 31 March 2012 is £63bn, 11.6% of the total UK government tax receipts.
Having a large financial sector brings substantial benefits to the UK. A deep and liquid financial market lowers the cost of finance to households and businesses. The financial services sector accounts for 7% of output and is a source of over 1 million jobs, two thirds of which are outside London. It contributes around £70bn, or 11%, of annual tax revenues. The UK’s financial sector also brings substantial benefits to EU households and firms, allowing them to access a broad range of services efficiently and reliably. UK-located banks underwrite around half of the debt and equity issued by EU companies. UK-located banks are counterparty to over half of the over-the-counter (OTC) interest rate derivatives traded by EU companies and banks. As many as 30 million EEA policyholders are insured through a UK-based insurer. Central counterparties (CCPs) located in the United Kingdom provide services to EU clients in a range of markets. UK-located asset managers account for 37% of all assets managed in Europe. Globally, the UK has the largest share of cross-border bank lending, foreign exchange trading and interest rate derivatives. It also has the second largest asset management industry and the fourth largest insurance industry in the world. This concentration of activity increases efficiencies in the provision of finance, which in turn support international trade and cross-border investment.