PwC is warning that the number of high earners in the UK hit by the new European rules on bonus capping requirements to be introduced under CRD IV regulations could be double earlier predictions, and will led to a review of pay structures in the banking industry.

The firm says that analysis of data released by the European Banking Authority (EBA) relating to individuals who earned over €1m (£830,000) in 2012 shows the UK has by far the highest number of high earners. There are over 2000 people earning over this amount in the UK, almost thirteen times higher than Germany, which has the second largest population of high earners with over 200 people.

As a result, UK financial institutions will need to review pay structures in light of the bonus cap as the current average ratio of variable pay to fixed pay is 370%, according to Jon Terry, partner in PwC's reward team.

Terry said identified staff make up only roughly half of total high earners in the UK, the lowest proportion of any member state. However, he warns that the numbers affected could double if the EBA implements proposals to expand the 'material risk takers' to all those with total compensation in excess of €500,000 (£414,000).

'The EBA's data leaves no doubt that the UK will feel the fullest force of the bonus capping provisions compared with all other Member States. Banks have a major challenge as to how they will reward their staff. Bringing more people into the stringent pay rules again further widens the gap between pay practices in Europe and the rest of the world,' Terry said.