Date: 14 October 2025
Source: Financial Times, The Times
In a major policy shift, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have jointly announced a reform of the UK’s banker remuneration regime. Under the new framework, the deferral period for senior banker bonuses will be reduced from eight to four years, while only 60% of bonus amounts exceeding £660,000 will need to be deferred — down from previous requirements.
The regulators argue that the change aligns with the government’s broader aim of strengthening the City of London’s global competitiveness, following Brexit and growing international competition from hubs such as New York and Singapore.
Supporters of the reform believe it will make London more attractive to senior financial professionals and stimulate investment activity. However, critics warn that the move could weaken accountability and encourage short-term risk-taking, reversing some of the safeguards introduced after the 2008 financial crisis.
For corporate clients and banking professionals, this regulatory adjustment signals a new era in financial compliance and executive compensation. Firms should review existing employment and bonus structures to ensure alignment with the revised rules while maintaining sound governance practices.
