PRA sets out strategic priorities for 2025-26

The PRA published its 2025/26 Business Plan (BP) on 10 April 2025, outlining its strategic priorities and key activities for the coming year.

The BP highlights the PRA’s planned work to deliver against its secondary objective on competitiveness and growth, as well as its continuing work in support of its primary objectives of safety and soundness, and protecting policyholders.

What does this mean?

The PRA’s strategic priorities for 2025/26 are grouped around four themes:

Maintaining and ensuring the safety and soundness of the banking and insurance sectors and ensuring continuing resilience.
Being at the forefront of identifying new and emerging risks, and developing international policy.
Supporting competitive, dynamic and innovative markets, alongside facilitating international competitiveness and growth, in the sectors it regulates.
Running an inclusive, efficient, and responsive regulator within the central bank.

Safety, soundness and resilience

The PRA will continue its preparations for the implementation of the Basel 3.1 standards, publishing its final rules once Parliament has revoked the relevant parts of the Capital Requirements Regulation (CRR).

With the Bank of England, it will run a Bank Capital Stress Test involving large banks, to inform the setting of capital buffers for both participating banks and at system-wide level.

For the first time, the PRA will publish individual firm results alongside aggregate results of its Life Insurance Stress Test (LIST 2025), and will provide further details about the planned 2026 stress test for general insurers.

Other activities include:

Improving its approach to internal model approvals, and assessing the adequacy of post-model adjustments (PMAs). The PRA will also continue to engage with firms on their implementation of the model risk management principles as set out in SS 1/23.
Reviewing its liquidity supervisory framework, including reporting requirements, with a view to consulting on potential changes in 2026.

Assessing insurers’ arrangements for managing risks associated with bulk purchase annuity (BPA) business.

Consulting on updates to SS3/19 on managing financial risks from climate change.

Monitoring general insurance firms’ use of underwriting strategies and pricing actions to navigate challenging points in the underwriting cycle.

Continuing to monitor firms’ operational and cyber resilience through the assessment of firms’ adherence to SS2/21 and the PRA’s use of threat-led penetration testing.

Identifying risks and developing international policy

The PRA will monitor trends in the area of new technologies such as the use of artificial intelligence and machine learning. It will also develop its proposed policy to implement the Basel Committee’s standard on banks’ cryptoasset exposures, and continue to assess relevant developments in digital money and cryptoassets markets.

The PRA notes it will engage with international forums and coordinate sector-wide simulation exercises in support of enhancing firms’ operational resilience and ability to withstand system-wide disruption, including cyber threats. It will finalise its rules for responding to operational incidents, as consulted on in CP17/24, and consult on expectations for the management of information technology and cyber resilience risks.

Competitive markets

The PRA states it will pursue its secondary objective on competitiveness and growth by ensuring its rules are proportionate and open to innovation, by maintaining efficient regulatory processes, and by upholding trust in the PRA and UK prudential framework.

Specific activities in support of this priority include:

Simplifying the capital and liquidity requirements for small domestic banks and building societies, publishing a policy statement in Q4 2025.
Streamlining regulatory data reporting requirements via the Future banking data (FBD) project. The PRA will work with industry to develop a coherent approach to data collections and consult on proposals to delete certain templates, among other activities.
Finalising revised rules for banks on streamlining material risk-takers’ remuneration requirements which would include reducing the period over which bonuses are deferred.
Finalising the PRA’s approach to international bank branches in H1 2025, following its 2024 targeted consultation.
Consulting on plans to develop a Matching Adjustment Investment Accelerator to support the insurance sector’s ability to make investments and support economic growth, and finalising changes to the UK framework for Insurance special purpose vehicles (ISPVs).

With the FCA, producing a report assessing the landscape for mutuals and potential actions that could be taken to support the sector.

Efficient regulator

The PRA notes its work with other stakeholders to deliver a concierge service to help international firms navigate the UK’s regulatory landscape. It will also continue to implement a range of operational initiatives to improve its productivity and efficiency.

What do firms need to do?

Engage with the PRA’s initiatives in support of competitive markets to identify growth opportunities.

Consider upcoming and proposed changes and factor these into business-wide strategic and operational planning.

Provide timely and accurate input to sector-specific stress tests as appropriate.

The PRA’s BP provides clarity on the regulator’s planned activities throughout 2025/26 and its areas of strategic focus. The emphasis on initiatives that will help to deliver against its secondary competitiveness and growth objective is clear. Firms should actively engage with this agenda and consider how best to capitalise on opportunities to grow their businesses and contribute to the UK’s economic ambitions.

It is also evident that the PRA’s agenda remains extremely busy, and that significant parts of its regulatory framework will be reviewed and finalised in the coming months. Navigating this agenda will require firms to be agile in response to changing requirements and expectations. Firms should be aware of the upcoming changes and proposals, and prepare to implement finalised rules as appropriate. This could involve a wider review of the adequacy of current compliance and control frameworks.

Sector-specific initiatives, such as the Bank Capital Stress Test, and Life Insurance Stress Test, will require participation for some firms, who will need to provide submissions and be prepared to respond to the regulator’s requests for information. Firms should ensure they have robust processes in place to respond to these requests in a timely and accurate manner.