Bonus season is not going to be a happy one this year. Everyone accepts that with the Centre for Economics and Business Research (CEBR) predicting a 16% drop in the total bonus pool, down from £8.8 billion in 2006 to £7.4 billion this year, there are going to be a lot of dashed expectations. So what are the knock on consequences of slashed bonuses for the individuals involved?

The Financial Times declared recently that this year a "bonus will be to keep hold of job". This is a fair point. The CEBR is predicting that some 6,500 jobs will go as a result of the fall out from the US sub-prime mortgage collapse, in the City over the next two years. Indeed a number of institutions have already announced job cuts.

With credit markets tumbling around the globe, it is highly unlikely that these will be the last of the jobs losses and puts a further dark cloud over bonus expectations.

Bonuses can be an intrinsic part of someone's remuneration package and a significant reduction can be a serious problem. It is a truism that the more someone earns the more they are likely to spend and borrow. Multi-million pound mortgages have been taken out in recent years, in the expectation that they can be paid off when bonus money comes in. Equally, holidays may have been booked and cars and yachts already ordered.

It is also true that the last few years have been bumper ones for those involved in finance, especially those in investment banking, and corporate finance. So this pre-spending may have surged in many households, which could exasperate the problems, this year, if that bonus money does not materialise.

"What I advise people they need to do is sit down and first consider what it is they are working for, it is just material or are they getting more out of their career?" Rebekah Fensome, life coach

Rebekah Fensome, a life coach and coaching psychologist, has been preparing clients for just such scenario. Working with them on strategies to minimise the impact of a reduced, or no bonus. She said: "Half of my clients from the City are experiencing this and I have been working with them on managing expectations and keeping motivated.

"What I advise people they need to do is sit down and first consider what it is they are working for, it is just material or are they getting more out of their career? We have been pulling together a financial plan for the next five years. Reassessing what they need in their lives and talking about what they need to get out of it. If it is only material then that might suggest it is time to get out."

Richard Fletcher, managing director of executive search consultancy, Fletcher Jones, also believes this year's bonus crunch could prompt a career rethink.

Fletcher is equally aware to the perils of falling victim to the "advanced spending" culture which could land many high earners in trouble, come spring next year. He said: "If you are used to getting a lot of money in March every year, it is almost considered part of your salary, so you do need it."

Fensome stresses that it is also important to keep in mind that this is only one year. Although she does advise clients, with high spending lifestyles, which may now need to be reined in, to be honest and open with their families.

"If you are used to getting a lot of money in March every year, it is almost considered part of your salary, so you do need it." Richard Fletcher, managing director, Fletcher Jones

She advises against the path chosen by one of her clients, who has decided to rack up his credit card, and extend their borrowing rather than admit to his family that there will be no bonus this year.

She adds; "There is no doubt that for some people the consequences of being honest [for a marriage] may be worse than they can face. It is impossible to generalise as different people will react differently and it will depend on how open the relationship is that people have. Of course not all [partners] will react badly."

Indeed people could be completely mis-judging how their families will react, on the back of the spend, spend, spend culture. For many people the conspicuous displays of wealth - new car, boat, home - is how they signify their achievement to their peers. It is questionable if this is kind of one-up-man-ship could ever be described as healthy and the kind of "health-check" life reassessment suggested by Fensome could well be long overdue.

For those who want to stick with the same career, it is important to keep in mind that financial markets have hit trouble before and jobs have come back. So while the prospects for some sectors may appear strained or dire at present, remember that the same could have been said for the technology sector back in 2000...

By Lindsey Rogerson