FCA Annual Work Programme 2025/26: A work plan reflecting the UK government’s pro-growth mission

On 8 April 2025, the FCA published its Annual Work Programme for 2025/26, setting out how it will deliver its four strategic priorities for the year ahead. The FCA’s accompanying press release puts a particular emphasis on its aims of making it easier for firms to test innovative products and supporting new firms applying for regulatory approval, both of which are key to supporting the government’s pro-growth mission.

The Work Programme pulls together a number of actions of which firms should already be aware from other recent regulator and government publications, for example the key regulator pledges of the FCA and the PRA in the government’s recent Action Plan (see our article here). The government’s push for growth is, again, clearly reflected in the plethora of existing and planned initiatives under the ‘Supporting growth’ priority in the Work Programme when compared to the other strategic focus areas.

The Work Programme is divided into four main sections in line with the corresponding priorities from the FCA’s new five-year Strategy 2025-2030 (as to which, see our article here). We take a look at some points of interest - and/or reminders from other recent publications - below.

For some thoughts on what the Work Programme means for digital assets and blockchain, see this article by our Digital Assets and Blockchain Team.

FCA actions here will include:

• Reducing the burden on firms by only collecting the data the FCA needs to achieve its regulatory objectives. It has already identified 3 regular data returns it plans to stop, which will benefit 16,000 firms. It has also identified further returns it is considering switching off and plans to consult on these in summer 2025.
• Continuing to digitise and simplify the way it asks firms to submit applications.
• Taking a more flexible approach, with less intensive supervision for those demonstrably seeking to do the right thing. This reiterates one of the FCA’s declared intentions for supervision in its new Strategy. As we pointed out in our article on the FCA’s feedback statement on its Consumer Duty rule review, with the FCA planning to loosen its supervisory leash where it thinks it’s safer to do so, this highlights the importance for firms of properly documenting the rationale for actions and decisions.
• Simplifying its triage processes to focus effort on higher risk cases and reduce effort on lower risk cases, including through automation. However, where the FCA identifies higher risk cases, it will take faster action to reduce or remediate the harm, including taking enforcement action in the right cases to achieve ‘impactful deterrence.’

New and ongoing work that the FCA will progress in 2025/26 to support its Strategy’s focus on sustained UK economic growth through a more competitive, productive and innovative UK financial services industry includes:

• Providing every firm that uses the FCA's Regulatory Sandbox to test innovative products with an authorisation case officer from the start.
• Extending its Pre-application Support Service (PASS) to all wholesale, payments and crypto firms.
• Enabling a new innovative market for private companies to improve their ability to grow and scale up through the Private Intermittent Securities and Capital Exchange System (PISCES).
• Supporting innovative firms through its innovation services and sandboxes, including the AI Lab. The FCA also confirms that its continuing approach to supporting innovation in AI will be to use its existing regulatory frameworks, ‘avoiding additional costs involved in creating specific new ones’.
• Indicating more frequently that it is ‘minded to approve’ promising start-up firms, allowing them to seek investment with confidence that they can secure regulated status.
• Accelerating a review of capital requirements for specialised trading firms.
• Launching proposals to simplify specific conduct requirements for commercial insurance businesses.

• Consulting on changes to the £100 contactless limit, potentially allowing firms with strong fraud controls to set their own limits. This article looks at the FCA’s recent engagement paper on the contactless limit, which closes on 9 May 2025.
• On Open Banking and Open Finance, using the powers expected under the Data (Use and Access) Bill to develop the regulatory framework for Open Finance, prioritising Small and Medium Enterprises (SME) lending and, as the Payment Systems Regulator (PSR) and its functions are primarily consolidated within the FCA, working with the PSR and partners to deliver the National Payments Vision (NPV), which includes a new Open Banking payment method (variable recurring payments). For more on the NPV, take a look at our article here.
• Streamlining rules, guidance materials and wider communications following introduction of the Consumer Duty, as summarised in its March feedback statement on its Consumer Duty rule review (see our article here).
• Linked to the above on its Consumer Duty rule review work, the FCA is also planning to ensure that future consumer protection work first considers the Consumer Duty, rather than requiring new rules. This overlaps with its ‘Helping consumers navigate their financial lives’ strategic priority (see below), under which it highlights its mortgage rule review work to simplify its responsible lending and advice requirements for mortgages, consult on removing outdated interest-only mortgage guidance and work with the Government to remove overlapping standards. Our article on the FCA’s recent announcement on its planned mortgages work can be viewed here.
• Improving the quality of credit information with changes to industry governance. See our article on the FCA’s Credit Information Market Study here.
• In the interests of ‘certainty and predictability’, the FCA also plans to:
  • ‘provide clarity on potential motor finance redress’, subject to Supreme Court and other legal timetables (also featured under ‘Helping consumers navigate their financial lives’ – see below); and
  • work with the Financial Ombudsman Service (FOS) and HM Treasury to modernise the redress framework, following the recent Call for Input (see our article here).
• Supporting the government’s strategy to establish the UK as a global sustainable finance hub.
• Establishing a presence in the U.S. and in the Asia Pacific region.

Motor finance, mortgage rule review work and Consumer Duty feature prominently in the work plans for this strategic priority. Firms should note that the FCA includes a warning in relation to the Duty that, where necessary, it will use its supervisory and enforcement powers to ensure customers are appropriately protected.

Financial inclusion and vulnerable customers remain in a prominent position on the FCA’s “to do” list, with the FCA looking to continue supporting the government’s development of a national financial inclusion strategy by participating in the Financial Inclusion Committee. It also plans to support the industry to deliver improvements for consumers in vulnerable circumstances, drawing on the Consumer Duty, good practice and areas of improvement identified in its recent review (see our article here).

The FCA’s work with the government to bring Buy Now, Pay Later (BNPL) (also referred to as Deferred Payment Credit) into its regulatory regime also receives a special mention. There is reference to FCA work on a rules framework to replace the disapplied Consumer Credit Act 1974 provisions on information disclosure. The FCA states that its new BNPL regulation will aim for ‘good outcomes for borrowers and alignment with rules already in place for other credit providers.’ For the story so far on BNPL regulation, take a look at our article on the latest government consultation here.

With slower growth in investment and Authorised Push Payment (APP) fraud as one of the outcomes that the FCA seeks under this strand of its Strategy, ongoing work highlighted in the Work Programme includes it leading a cross-industry project to better understand the flow of illegitimate funds across different types of APP fraud to better prevent them.

New work for 2025/26 will include building a new data-led detection capability to bring together multiple data sets. The aim is that this will enable the FCA to increase its identification of financial crime in regulated firms and take timely action to tackle it.

In what could be seen as a further indication of the relative priority of its various workstreams, among the FCA’s Budget priorities for the year ahead are:

• Investing £9m in its continuing Smarter Regulatory Framework work on the repeal of assimilated EU law and its replacement, where appropriate, with FCA rules tailored to UK markets.
• £6.9m to be allocated to its review of motor finance discretionary commission complaints.
• A combined total of £3.2m allocated to the development of Open Banking (£1.2m) and Open Finance (£2m).
• £3m for the new regulation of ESG ratings.