Regulated Fees and Levies: Rates Proposals 2026/27

Why It Matters

The fee adjustments directly affect the cost base of UK‑based banks, credit unions and other regulated firms, influencing budgeting and compliance strategies. Refunds of surplus and lower fees for smaller entities signal the PRA’s effort to balance regulatory funding with industry sustainability.

Key Takeaways

• PRA proposes fee rates to meet 2026/27 Annual Funding Requirement
• Future Banking Data programme cost rises by £3.6m (~$4.5m)
• Internal model fees to increase with CPI, rounded to £2,500 increments
• Type 1 authorisation fee for friendly societies set to £0
• 2025/26 surplus of £2.0m (~$2.5m) to be partially refunded

Pulse Analysis

The Prudential Regulation Authority’s 2026/27 fee consultation marks a pivotal update to the regulatory funding framework that underpins the UK financial sector. By aligning fee rates with the Annual Funding Requirement, the PRA ensures it can sustain supervisory activities, especially as it expands data‑driven initiatives like the Future Banking Data (FBD) programme. The £3.6 million (≈$4.5 million) uplift reflects added responsibilities such as mortgage data collection and streamlined reporting, positioning the regulator to better monitor systemic risk while attempting to keep the burden on firms manageable.

Key changes target the cost structure of internal model applications and maintenance, tying increases to CPI and standardising increments at £2,500. This approach provides predictability for banks and insurers that rely on internal models for capital calculations. Moreover, the introduction of a dedicated fee for Securities Financing Transactions Value‑at‑Risk, effective from the Basel 3.1 rollout on 1 January 2027, acknowledges the growing complexity of these markets while offering a reduced rate to reflect lower processing intensity. The elimination of the Type 1 fee for friendly societies and credit unions further demonstrates the PRA’s nuanced calibration of fees based on firm size and systemic importance.

Financial institutions will also see a modest windfall from the PRA’s surplus management. After accounting for £1.9 million (≈$2.4 million) in penalties—most of which remain with the regulator—an estimated £2.0 million (≈$2.5 million) surplus was generated in 2025/26. The PRA proposes to refund roughly £0.5 million (≈$0.6 million) to fee‑payers, a move that could improve cash flow for smaller firms and signal a more collaborative regulator‑industry relationship. Overall, these proposals balance the need for robust supervision with fiscal prudence, setting the tone for the sector’s financial planning in the coming year.