1: Overview
2025/26: Bank of England Fees and Levies
The Bank of England’s (the Bank) Court sets the Bank’s strategy and compiles its medium-term spending plans within its financial framework, in fulfilling its responsibilities under the Bank of England Act 1998. The costs of running the Bank are allocated to different groups of levy/fee payers proportionate to the activity undertaken in fulfilling its statutory objectives. The Bank’s costs in aggregate are subject to tight cost control and are budgeted within constraints set by Court.
The allocation of these costs between different levy/fee payers will change year-on-year as the Bank balances strategic operational investment priorities and the costs of running the Bank’s day-to-day operations. Each year there will be a rebalancing between different levies/fees to reflect this.
Almost all (c.97%) of the Bank’s operational P&L costs are recovered through the Bank’s direct levies and fees, which include the BoE Levy, PRA Levy, and Other eg management fees for Banknotes and the RTGS tariff. The remaining 3% is funded through Customer Banking charges.
Year-on-year, total levies/fees have increased by 3%. Within this, the BoE Levy has increased by 4%, the PRA Levy has decreased by 1% and Other Levies/Fees have increased by 4%.
The table below shows the total amounts to be collected via levies and fees in respect of the 2025/26 financial year:
|
|
2025/26 £m |
2024/25 £m |
Movement - £m |
Movement - % |
|
BoE Levy |
596 |
574 |
22 |
4% |
|
PRA Levy |
350 |
353 |
(3) |
(1%) |
|
Other Levies/Fees |
236 |
226 |
10 |
4% |
|
Total |
1,182 |
1,153 |
29 |
3% |
For the financial year 2025/26, there is a £29 million/3% year-on-year increase in the Bank’s costs to be recovered via levies and tariffs, which has differing impacts across the Bank’s funding streams:
- within the BoE Levy of £596 million, operational costs have increased £30 million/10% from £298 million to £328 million, balanced by a decrease of £8 million/3% in transitional costs and true-ups from £276 million to £268 million – per the BoE Levy Notification Document.
- the PRA Levy has decreased £3 million/1% from £353 million to £350 million – per the PRA fees policy statement.
- Other Levies/Fees, totalling £236 million, has increased by £10 million/4% driven by the banknote programme and an increase to the RTGS Tariff as the Bank begins to recoup the build costs of the new enhanced system.
Prudential Regulation Authority final policy statement
1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses the PRA received to consultation paper (CP) CP8/25 – Regulated fees and levies: Rates proposals for 2025/26. It also contains the PRA’s final policy, as follows:
- the fees rates to meet the PRA’s Annual Funding Requirement (AFR) for the financial period Saturday 1 March 2025 to Saturday 28 February 2026 (‘fee year’); and
- amendments to the Fees Part of the PRA Rulebook (Appendix 2).
1.2 This PS is relevant to all firms that currently pay PRA fees or are expecting to do so within the 2025/26 fee year.
Background
1.3 In CP8/25 the PRA proposed:
- the fees rates to meet the PRA’s 2025/26 Annual Funding Requirement (AFR);
- the introduction of a cost allocation to fund the PRA’s activities in the Future Banking Data project;
- to change internal model application fees, the model maintenance fee, the Special Project Fee for restructuring, the minimum fee and the new firm authorisation fee for Type 3 applications;
- to change the fees rules for firms applying to cancel before the start of the fee year;
- setting out how the PRA intends to allocate the surplus from the 2024/25 AFR; and
- the retained penalties for 2024/25.
1.4 In determining its policy, the PRA considers representations received in response to consultation, publishing an account of them and the PRA’s response (‘feedback’). Details of any significant changes are also published. In this PS, the ‘Summary of responses’ contains a general account of the representations made in response to the CP and the ‘Summary of responses’ subsection below details the PRA’s feedback.
1.5 In carrying out its policy making functions, the PRA is required to have regard to various matters. In CP8/25 the PRA explained how it had regard to the most relevant of these matters in relation to the proposed policy. The ‘Changes to draft policy’ section of this chapter refers to that explanation, taking into account consultation responses where relevant.
Summary of responses
1.6 The PRA received three responses to the CP, with all the respondents consenting to their names being published, as set out at Appendix 1. All three responses supported the PRA’s proposal to lower the minimum fees for non-directive friendly societies as well as small and medium sized credit unions. One respondent supported the proposal to maintain the 11% discount for non-directive general insurance firms’ periodic fees and another supported credit unions being exempt from the increase to Type 3 new firm authorisation applications.
1.7 One respondent supported the allocation of funding to Future Banking Data (FBD), given the importance of reducing costs associated with regulatory reporting. They agreed with the areas of focus of the FBD work programme for 2025/26 set out in CP8/25 but asked that the PRA goes further by also progressing work on some of the more fundamental changes to reporting, for instance by considering a move towards the collection of granular data. As mentioned in CP8/25, a key priority for the PRA this year is to work with industry to identify priority areas for reform to reporting over time. The reporting of granular data, eg loan level data, is one of a number of topics the PRA intends to discuss with industry over the coming year.
Changes to draft policy
1.8 This policy statement takes account of how the policy advances the PRA’s objectives and of significant matters that the decision maker had regard to. The changes to the draft policy contained in CP8/25 are deemed to be minor, therefore the PRA’s analysis, as set out in CP8/25, remains unchanged.
1.9 The PRA’s Total Funding Requirement (TFR) for 2025/26 is £350.2 million, which is 0.8% lower than the 2024/25 TFR of £353.0 million. The AFR for 2025/26 is £336.4 million, which is an £5.1 million increase on the 2024/25 AFR of £331.3 million. The AFR is £7.7 million higher than that proposed in CP8/25 due to the PRA receiving an increased allocation of the Bank’s wider investment portfolio and central support costs, partially offset by a decrease in the pensions provision.
1.10 Table 1.A sets out the allocation of the PRA’s AFR to fee blocks for the 2025/26 and provides comparison to the draft allocation set out in CP8/25, and the allocation for the 2024/25 fee year.
Table 1.A: Allocation of AFR for 2025/26 to fee blocks and comparison to the draft allocation[1]
|
£ million |
Final AFR |
Draft AFR |
Change |
2024/25 AFR |
Change |
|
Minimum Fees |
0.6 |
0.6 |
- |
0.6 |
- |
|
Deposit takers |
210.9 |
206.1 |
4.8 |
207.7 |
3.2 |
|
Insurers – general |
48.2 |
47.1 |
1.1 |
47.4 |
0.7 |
|
Insurers – life |
58.5 |
57.2 |
1.3 |
57.6 |
0.9 |
|
Managing agents at Lloyd’s |
2.0 |
1.9 |
0.1 |
1.9 |
0.0 |
|
The Society of Lloyd’s |
2.5 |
2.5 |
0.0 |
2.5 |
0.0 |
|
Firms dealing as principal |
13.7 |
13.4 |
0.3 |
13.5 |
0.2 |
|
336.4 |
328.7 |
7.7 |
331.3 |
5.1 |
[1] Rows and columns may not sum due to rounding
1.11 Table 1.B provides analysis of the final tariff data for 2025/26 fee year, to allocate the PRA’s AFR to firms within fee blocks compared to the draft data presented in CP8/25.
Table 1.B: Analysis of tariff data for allocation of fees within fee block compared to draft tariff data[2]
|
Fee block |
Tariff basis |
2025/26 final number of firms |
2025/26 draft number of firms |
Mvt to number of firms (%) |
2025/26 final tariff data (£ billion) |
2025/26 draft tariff data (£ billion) |
Mvt to tariff data (%) |
Mvt in fee rates from draft (%) |
|
A0 |
Minimum Fees |
944 |
1,210 |
(22.0%) |
n/a |
n/a |
n/a |
- |
|
A1 |
Modified Eligible Liabilities |
671 |
677 |
(0.9%) |
3,977 |
3,978 |
(0.0%) |
2.4% |
|
A3 |
Gross Written Premiums (GWP) |
317 |
319 |
(0.6%) |
101 |
90 |
12.9% |
(9.4%) |
|
Best Estimate Liabilities (BEL) |
171 |
159 |
7.6% |
(5.1%) |
||||
|
A4 |
Gross Written Premiums (GWP) |
125 |
131 |
(4.6%) |
155 |
138 |
11.8% |
(8.3%) |
|
Best Estimate Liabilities (BEL) |
1,240 |
1,166 |
6.4% |
(3.8%) |
||||
|
A5 |
Active Capacity |
55 |
55 |
0.0% |
57 |
56 |
0.9% |
1.5% |
|
A10 |
Total Trading Book Assets |
9 |
9 |
0.0% |
2,397 |
2,398 |
(0.1%) |
2.4% |
|
Financial & Operating Income |
19 |
19 |
0.0% |
2.4% |
[2] Rows and columns may not sum due to rounding.
1.12 The final fee rates for 2025/26 are slightly higher than those stated in CP8/25 due to the increase in the final AFR from the draft figure. The fee rates for the A3 and A4 blocks are lower because the indicative fee rates used for these blocks in CP8/25 were completed using 2024/25 fee tariff data (given the UK Solvency II reporting deadline was after publication of the CP) and have now been calculated using the updated 2025/26 data.
1.13 The reduction in the number of firms in the A0 Minimum Fees fee block relates to the lowering of the minimum fee for non-directive insurers, small and medium sized credit unions to £0.
1.14 CP8/25 stated that there was a surplus of £4.0 million including retained penalties of £2.1 million for the 2024/25 fee year. Following the finalisation of the PRA’s annual accounts for 2024/25, the surplus is confirmed to be £6.8 million including retained penalties. The £2.1 million benefit will be applied across all fee blocks excluding those firms who incurred fines.
1.15 The final rules have also been updated to correct the definition of Best Estimate Liabilities for fees purposes for UK Solvency II general insurers. The previous reference in template IR.12.01.01 of row code R0030, column code C0090, has been corrected to row code R0030, column code C0040. All invoices that will be issued to fee payers in the general insurance fee block will be calculated using this updated reference.
Implementation
1.16 The implementation date for the PRA Rulebook: PRA Fees Amendment Instrument 2025 is Wednesday 2 July 2025.