UK to Pay Bankers’ Bonuses Faster After Rule Change
The UK will now allow high-earning bankers to get their bonuses faster after regulators decided to relax post-2008 financial crisis rules. The Bank of England and the Financial Conduct Authority (FCA) have shortened the time senior bankers must wait to receive their full bonuses from eight years to four.
Since 2015, senior bankers were required to wait eight years for their full bonus. This rule was meant to make sure they could be held responsible for any financial misconduct that might be discovered years later, even after leaving their jobs. By cutting this period in half, regulators are making it easier for bankers to access their pay sooner.
The changes go further than a previous consultation suggested. Only 60% of the part of a bonus above £660,000 now has to be deferred. Previously, a much larger portion of bonuses had to be held back. This change is likely to be welcomed by the City of London, which has seen several post-crisis restrictions rolled back in recent years. For example, two years ago, the UK removed the cap that limited bankers’ bonuses to twice their salaries.
The regulators said the shorter deferral periods still provide enough time to uncover any problems. They also noted that this move will make the UK’s rules more similar to those in other countries. In the European Union, bankers’ bonuses are usually held for three to five years, while the United States has no such rules.
Sam Woods, chief executive of the Bank’s Prudential Regulation Authority, said the new rules would reduce unnecessary bureaucracy without encouraging the risky pay practices that contributed to the 2008 financial crisis. He added that the changes show the UK’s commitment to remaining competitive in global banking.
Deferred bonus rules have sometimes been used to punish wrongdoing in the financial sector. For example, Barclays froze and later cancelled £18 million in pay and bonuses for its former chief executive Jes Staley. He resigned in 2021 after the FCA investigated his links to Jeffrey Epstein and later found that he had misled the regulator.
The move to relax bonus rules is part of a larger effort to reduce red tape across the City of London. The UK Chancellor, Rachel Reeves, said in a July speech that excessive regulations were acting like a “boot on the neck” of businesses and could “choke off” innovation. She has been pushing regulators, including the Bank of England and the FCA, to loosen rules further to encourage economic growth.
Overall, the changes reflect a broader trend of easing post-financial crisis restrictions on bankers in the UK. By allowing faster payouts and reducing deferred amounts, the government and regulators hope to make the City more competitive while still keeping safeguards to prevent reckless financial behavior.
Published: 16th October 2025
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