CP7/26 – Regulated fees and levies: Rates proposals 2026/27

Consultation paper 7/26

Published on
17 April 2026

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Responses are requested by Friday 15 May 2026.

Consent to publication

In the policy statement for this consultation, the PRA will publish an account, in general terms, of the representations made as part of this consultation and its response to them. In the policy statement, the PRA is also required to publish a list of respondents to its consultations, where respondents have consented to such publication.

When you respond to this consultation paper, please tell us in your response if you agree to the publication of your name, or the name of the organisation you are responding on behalf of, in the PRA’s feedback response to this consultation.

Please make it clear if you are responding as an individual or on behalf of an organisation.

Where your name comprises ‘personal data’ within the meaning of data protection law, please see the Bank’s Privacy Notice above, about how your personal data will be processed.

Please note that you do not have to give your consent to the publication of your name. If you do not give consent to your name being published in the PRA’s feedback response to this consultation, please make this clear with your response.

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You have the right to withdraw, amend or revoke your consent at any time. If you would like to do this, please contact the PRA using the contact details set out below.

Responses can be sent by email to: CP7_26@bankofengland.co.uk.

Alternatively, please address any comments or enquiries to:
PRA Fees Policy Team
Finance, Planning, Performance & Analysis
Prudential Regulation Authority
20 Moorgate
London
EC2R 6DA

1: Overview

1.1 This consultation paper (CP) sets out proposals for the Prudential Regulation Authority’s (PRA) fees for 2026/27. The proposals would make amendments to the Fees Part of the PRA Rulebook (Appendix). The proposals include:

• the fees rates to meet the PRA’s 2026/27 Annual Funding Requirement (AFR);
• an increase to the cost allocation to fund the PRA’s activities in the Future Banking Data (FBD) programme;
• changes to internal model application fees, the model maintenance fee, the Special Project Fee for restructuring and the new firm authorisation fee for Type 1 (friendly societies and credit unions) and 3 applications (banks, building societies and insurance firms);
• introducing a new internal model application and model maintenance fee for Securities Financing Transactions Value-at-Risk (SFT VaR);
• setting out how the PRA intends to allocate the surplus from the 2025/26 AFR (Chapter 3); and
• the retained penalties for 2025/26 (Chapter 4).

1.2 This CP is relevant to all firms that currently pay PRA fees or are expecting to do so within the 2026/27 fee year.footnote [1]

1.3 The PRA has a statutory duty to consult when changing rules (FSMA s138J), or new standards instruments (FSMA s138S). When not making rules, the PRA has a public law duty to consult widely where it would be fair to do so.

1.4 In carrying out its policymaking functions, the PRA is required to comply with several legal obligations. The analysis in this CP explains how the proposals have had regard to the most significant matters, including an explanation of the ways in which having regard to these matters has affected the proposals.

Summary of proposals

1.5 The PRA’s AFR for 2026/27 is composed solely of the budgeted cost of Ongoing Regulatory Activities (ORA). Further information can be found in Chapter 2. The proposed ORA for 2026/27 is £329.3 million, a decrease of £7.1 million (2%) from 2025/26. This figure is provisional and may need to be revised when final estimates for the PRA’s costs are available (see Chapter 2 for further detail).

1.6 The PRA’s proposed Total Funding Requirement (TFR) for 2026/27 is £346.6 million, a decrease of £3.6 million (1%) from 2025/26 (£350.2 million). The TFR is composed of the AFR and other fees to industry.

Implementation

1.7 The PRA proposes to implement the changes resulting from this CP on Monday 13 July 2026 (with the exception of changes resulting from paragraph 2.19, which the PRA proposes to implement on Friday 1 January 2027).

Responses and next steps

1.8 This consultation closes on Friday 15 May 2026.The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP7_26@bankofengland.co.uk.

1.9 When providing your response, please tell us whether or not you consent to the PRA publishing your name, and/or the name of your organisation, as a respondent to this CP.

1.10 Please also indicate in your response if you believe any of the proposals in this consultation paper are likely to impact persons who share protected characteristics under the Equality Act 2010, and if so, please explain which groups and what the impact on such groups might be.

2: The PRA’s proposals

PRA Annual Fees Consultation – 2026/27

2.1 This chapter sets out proposals on fee rates to meet the PRA’s TFR for 2026/27. Detailed information on the PRA’s strategy and workplan for the coming year, which will be funded by the TFR, is set out in the PRA Business Plan 2026/27, which is published alongside this consultation.

2026/27 Total Funding Requirement (TFR)

2.2 The TFR covers the PRA’s total fees and comprises the AFR and ‘other fees’ (see Table 2.A). The PRA’s TFR for 2026/27 is £346.6 million, a decrease of £3.6 million from 2025/26 (£350.2 million).

Table 2.A: Estimated Total Funding Requirement for 2026/27 and movement from 2025/26(*)

£ million	2026/27	2025/26	Change	Percentage change
Ongoing Regulatory Activities	329.3	336.4	(7.1)	(2%)
Annual Funding Requirement	329.3	336.4	(7.1)	(2%)
Model Maintenance Fee	9.6	9.6	0.0	0%
Future Banking Data	6.8	3.2	3.6	111%
Other fees	1.0	1.0	0.0	0%
Other fees to industry	17.4	13.8	3.6	26%
Total Funding Requirement (TFR)	346.6	350.2	(3.6)	(1%)

Footnotes

• (*) Rows and columns may not sum due to rounding.

2026/27 Annual Funding Requirement (AFR) and comparison with 2025/26

2.3 The AFR is the budget required by the PRA to advance its statutory objectives. The PRA’s proposed AFR for 2026/27 is £329.3 million and is composed of the budget for the ORA.

2.4 The proposed AFR for 2026/27 is £7.1 million lower than the AFR for 2025/26 of £336.4 million, a decrease of 2%, which is mainly due to lower PRA-specific costs, lower allocations from central support areas, partially offset by increased investment in Bank-wide data portfolios.

2.5 The impact of external market conditions on the PRA’s pension costs for 2026/27 has yet to be fully confirmed. The figure for the ORA is therefore provisional and may need to be revised when final cost estimates are available.

Allocation of 2026/27 Ongoing Regulatory Activities (ORA) to fee blocks

2.6 The proposed allocation of the ORA across the seven PRA-authorised fee blocks, including the minimum fee block, is set out in Table 2.B. Firms are allocated to PRA fee blocks based on the regulated activities for which they hold permissions, with firms paying a periodic fee for each fee block into which they fall. The proposed allocation to fee blocks is based on an estimate of the anticipated work to be performed by the PRA within each area and reflects the PRA’s risk-based approach. The fee block allocation percentages are unchanged from 2025/26.

2.7 Within each fee block, the costs to be recovered from individual firms are based on the size of their business. The aim is to ensure that those firms that could potentially cause the greatest harm to the stability of the UK financial system are the main contributors to the PRA’s AFR. As for previous years, cost recovery within the A1 fee block is weighted further towards higher impact firms.

2.8 Any firm authorised to carry out any of the regulated activities covered by the ‘A’ fee blocks is also subject to the A0 minimum fee (except for the A6 fee block, which consists of the Society of Lloyd’s and its subsidiaries only) and is invoiced on an individual basis.

Table 2.B: Proposed 2026/27 allocation of AFR and movement from 2025/26

			2026/27		2025/26		Change
£ million			Total AFR		Total AFR		£m	%
A0	Minimum Fees		0.5footnote [2]		0.6		(0.1)	(9%)
A1	Deposit takers		206.5		210.9		(4.4)	(2%)
A3	Insurers – general		47.1		48.2		(1.0)	(2%)
A4	Insurers – life		57.3		58.5		(1.2)	(2%)
A5	Managing agents at Lloyd's		1.9		2.0		(0.0)	(2%)
A6	The Society of Lloyd's		2.5		2.5		(0.1)	(2%)
A10	Firms dealing as principal		13.4		13.7		(0.3)	(2%)
Ongoing Regulatory Activities			329.3		336.4		(7.1)	(2%)

Online fees calculator

2.9 The Financial Conduct Authority (FCA) provides a facility on its website to enable firms to calculate their periodic fees for the forthcoming year based on the proposed PRA consultative rates (Appendix). The fee calculator for 2026/27 fees is expected to be available to firms from Friday 17 April 2026.

Table 2.C: Analysis of tariff data for allocation of fees within fee blocks compared to 2025/26()

Fee block	Tariff basis	2026/27 estimated number of firms	2025/26 number of firms	Change(%)	2026/27 estimated tariff data (£ billion)	2025/26 tariff data (£ billion)	Change(%)	Change in fee rates from 2025/26 (%)
A0	Minimum Fees	916	944	(3%)	n/a	n/a	n/a	n/a
A1	Modified Eligible Liabilities	654	671	(3%)	4,197	3,977	6%	(7%)
A3	Gross Written Premiums	311	317	(2%)	103	101	2%	(4%)
	Best Estimate Liabilities	171	170	1%	(2%)
A4	Gross Written Premiums	124	125	(1%)	154	154	0%	(2%)
	Best Estimate Liabilities	1,239	1,240	0%	(2%)
A5	Active Capacity	57	55	4%	60	57	6%	(8%)
A10	Total Assets	8	9	(11.1%)	2,520	2,397	5%	(7%)
	Total Operating Income	20	19	2%	(4%)

Footnotes

• () As annual Solvency UK returns for the 2025 financial year are not submitted until after the publication of this CP, the indicative fee rates for both A3 and A4 fee block payers shown in this table and the draft rules (Appendix) uses year-end data for 2024. Final fee rates will be based on 2025 data. Rows and columns may not sum due to rounding.

Other fees

2.10 Other fees include cost allocations, the model maintenance fees, Special Project Fees for restructuring (SPF) and regulatory transaction fees. These fees vary from year to year and can lead to changes in periodic fees. Additional context on the PRA’s approach to other fees can be found in SS3/16 – Fees: PRA approach and application.

2.11 For 2026/27, the PRA expects to raise £17.4 million in other fees, an increase of £3.6 million from 2025/26.

Cost allocation for Future Banking Data (FBD)

2.12 The FBD cost is £6.8million, an increase of £3.6million from 2025/26. The increase reflects the launch and subsequent development of the firm facing portal to include enhancements and additional authorisation applications, investigating the feasibility of a solution for UK mortgage data collection, and the identification of further proposed deletions and prioritisation of wider reforms to reduce firm reporting burden. This work will continue to benefit from close engagement with firms. No changes are proposed to the population of firms subject to this fee for the 2026/27 financial year.

Internal model application fees and the model maintenance fee

2.13 The model application fees and model maintenance fees were reviewed as part of last year's fees consultation. For the 2026/27 fee year, the PRA is proposing to increase these fees in line with CPI inflation in the year to December 2025 and rounded to the nearest £2,500.

2.14 The vast majority of firms holding internal model permissions and firms applying for model permissions come from entities paying fees in the highest application bands, so the PRA does not consider increasing these charges to be a barrier to entry.

Special project fees for restructuring (SPF)

2.15 The SPF hourly rates represent the approximate cost to the PRA of the resources and time spent on the SPF, and so are a combination of the cost of the resource used and the share of the overhead or corporate service costs incurred (such as technology and premises).

2.16 For the 2026/27 fee year, the PRA proposes to increase the rates in line with CPI inflation in the year to December 2025.

New firm authorisation application fees

2.17 The PRA reviewed the fees for new firm authorisation applications as part of last year's fees consultation. For 2026/27 the PRA proposes to lower the fee charged to Type 1 applications from prospective friendly societies and credit unions to £0. This is to reduce the cost burden to these entities and to remove a possible barrier to entry.

2.18 The PRA also proposes to increase the fee charged to Type 3 applications from prospective deposit takers (except credit unions) and insurance firms (except friendly societies), in line with the fee charged by the FCA for a comparable application. The level of the fee remains low compared with other costs associated with setting up a new PRA regulated firm.

Table 2.D: New firm authorisation application fees

Application type £		2025/26		Proposal for 2026/27
A3 or A4 friendly society or A1 credit union		1,500		0
A3 ISPV or A5 managing agent		5,000		5,000
All other firms		27,870		28,150

Securities Financing Transactions Value-at-Risk (SFT VaR) and minor amendments to reflect Basel 3.1 terminology

2.19 As part of the implementation of Basel 3.1, due to come into effect from 1 January 2027, the PRA will be replacing the Internal Models Approach for Master Netting Agreements (MNAs) with the SFT VaR method (used for calculating the exposure value of SFTs). The PRA is proposing to introduce a new internal model application fee and model maintenance fee for SFT VaR to also come into effect from the Basel 3.1 implementation date of 1 January 2027. Both fees are scaled initially at half that of the Internal Model Method fees to reflect the lower complexity in the PRA’s processing of these applications.

3: Surplus for 2025/26

3.1 In the PRA’s 2025/26 fee year, there was a surplus of £2.0 million. This is an estimate subject to auditing and therefore subject to change, with the final figure to be confirmed when the final policy is published.

Surplus on AFR

3.2 This surplus is allocated to firms in two stages:

• Stage 1 – allocation to fee blocks. The PRA proposes to allocate the AFR surplus across all fee blocks, with the exception of the A0 minimum fee block, in proportion to the AFR for the 2025/26 fee year; and
• Stage 2 – allocation to individual firms. Within each fee block, the AFR surplus is allocated with reference to the fee block population and tariff data for the 2025/26 fee year, excluding firms that are no longer PRA fee payers.

3.3 Table 3.A includes the proposed allocation of the AFR surplus for 2025/26, presented by firm type.

Table 3.A: Proposed allocation of the AFR surplus for 2025/26(*)

£ million	ORA	Total
A1 Deposit takers	1.3	1.3
A3 Insurers – general	0.3	0.3
A4 Insurers – life	0.3	0.3
A5 Managing agents at Lloyd's	0.0	0.0
A6 The Society of Lloyd's	0.0	0.0
A10 Firms dealing as principal	0.1	0.1
Total estimated surplus	2.0	2.0

Footnotes

• (*) Rows and columns may not sum due to rounding

Surplus on FBD cost allocation

3.4 The PRA proposes to refund the difference between fees collected and actual spend in relation to the 2025/26 financial year. The amount of the FBD cost allocation to be refunded to fee payers is estimated to be £0.5 million. This is a draft, unaudited figure and therefore subject to change, with the final figure to be confirmed when the final policy is published.

3.5 The refund will be allocated to firms proportionate to the FBD cost allocation paid for the 2025/26 fee year.

4: Financial penalty scheme and application of retained penalties for 2025/26

4.1 The legislative framework for financial penalties is set out in FSMA. Under FSMA, the PRA must:

• pay any fines and other financial penalties received as a result of regulatory enforcement activity to HM Treasury (HMT) after deducting certain enforcement costs (these costs are referred to as ‘retained penalties’);
• publish and operate a financial penalty scheme to ensure that retained penalties are applied for the benefit of PRA-authorised firms; and
• ensure that any firm that has had a penalty imposed does not share in the distribution of retained penalties for the relevant fee year.

4.2 The PRA’s financial penalty scheme provides for retained penalties to be refunded as a rebate to the periodic fees payable by firms in the six fee blocks. There is no allocation to the A0 minimum fee block, as it does not bear any share of enforcement costs.

Application of retained penalties for 2025/26

4.3 In 2025/26, enforcement activity by the PRA resulted in fines and penalties of £1.9 million, of which £1.5 million is included into the calculation of the £2.0 million retained surplus from 2025/26. The remainder is remitted to HMT.

5: PRA objectives analysis

5.1 The PRA considers the proposals to be compatible with the PRA’s statutory objectives under FSMA:

• to promote the safety and soundness of PRA-authorised firms;
• in the context of insurance, to contribute to policyholder protection;
• as a secondary objective, to facilitate effective competition in the markets for services provided by PRA-authorised persons in carrying out regulated activities; and
• also as a secondary objective, to facilitate the international competitiveness of the UK and its medium to long term growth.

5.2 The PRA considers that the proposed PRA Fees Amendment Instrument 2026 will enable the PRA to fund the regulatory activities required to advance its statutory objectives during 2026/27.

5.3 The proposed fees levels are expected to advance the PRA’s secondary competition objective because fees for ORA are allocated in a proportionate manner across all PRA-authorised firms, while fees for specific projects and transactions are targeted only to those predominantly larger firms which generate these specific regulatory activities or, in the case of fees for new authorisation applications, continue to be subsidised by incumbent firms. For these reasons, the PRA considers the proposals to be compatible with the requirement for the PRA to act in a way that advances this objective. Through the use of model application and maintenance/change fees, the PRA also seeks to ensure a balance of its fees being appropriately targeted while not representing a barrier to the adoption and use of models by smaller firms.

5.4 The PRA expects the proposals to advance the secondary objective of competitiveness and growth. Given the international nature of some financial services, a transparent and proportionate fee regime helps to support the stability and competitiveness of the UK’s financial markets. The PRA also considers the importance of the financial services sector contributing to sustainable economic growth. By ensuring the proposals consider the size and nature of firms, PRA fees would not act as a barrier to the growth of the financial services sector.

‘Have regards’ analysis

5.5 In developing these proposals, the PRA has had regard to the FSMA regulatory principles and the aspects of the Government’s economic policy set out in the latest HMT recommendation letter from November 2024. The following factors, to which the PRA is required to have regard, were significant to the PRA’s analysis of the proposals:

• The principle that a burden or restriction which is imposed on a person should be proportionate to the benefits which are expected to result from the imposition of that burden (FSMA regulatory principles): By allocating fees in a proportionate way through the use of fee blocks that take into account the size and nature of the PRA-authorised community, the PRA has had regard to this principle.
• The desirability of sustainable growth in the economy of the UK in the medium or long term (FSMA regulatory principles): The PRA has had regard to this principle by considering the interests of minimum fee payers and firms not subject to certain PRA activities.
• The principle that the PRA should exercise its functions transparently (FSMA regulatory principles and Legislative and Regulatory Reform Act of 2006): The PRA has had regard to this principle by clearly setting out the basis on which the proposed fees are calculated and providing advance notice of the proposed changes to its fees and charges.
• Recognition of different business models (FSMA regulatory principles) and innovation (HMT recommendation letters): The proposals contained within this CP consider the differences in the business models employed by firms and support innovation by ensuring that they do not result in barriers to new entrants.

5.6 The PRA has had regard to other factors as required. Where analysis has not been provided against a ‘have regard’ for this set of proposals, it is because the PRA considers that ‘have regard’ to not be a significant factor for this set of proposals.

Cost benefit analysis

5.7 The PRA is exempt from having to carry out a cost benefit analysis on its draft fee rates.

Impact on mutuals

5.8 Within each fee block, the proposed costs to be recovered from individual firms are based on the size of their business. The PRA proposes to continue to discount the periodic fees payable by non-Directive general insurance firms, many of which are mutuals, by 11%. In addition, all life insurance non-Directive firms are excluded from periodic fees. The PRA does not consider the impact of the proposed fee rates on mutual societies to be significant. The PRA proposes to lower the new firm application fee to £0 and maintain the minimum fee for small non-directive friendly societies, small and medium sized credit unions at £0. More broadly, the fees on mutual societies continue to be lower than the minimum fee that applies to all other firms, and considerably lower than the cost to the PRA of supervising these firms.

Equality and diversity

5.9 The PRA considers that the proposals do not give rise to equality and diversity implications.

1. The 2026/27 fee year began on Sunday 1 March 2026 and will end on Sunday 28 February 2027.
2. The Minimum Fees allocation is reducing to £0.5 million from £0.6 million due to the reduction in the fee paying population as indicated in Table 2.C

The Minimum Fees allocation is reducing to £0.5 million from £0.6 million due to the reduction in the fee paying population as indicated in Table 2.C

The 2026/27 fee year began on Sunday 1 March 2026 and will end on Sunday 28 February 2027.

Appendix

• Appendix: Draft PRA Rulebook: PRA Fees Amendment Instrument 2026 (PDF 1.1MB)

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