Increase in Retail Deposits Threshold - Leverage Ratio

Summarising PS22/25 - mitigating unintended regulatory tightening due to a stagnation in the LR retail deposits threshold despite contextually material increases in nominal UK GDP.

This summary outlines the key changes set out in PS22/25, which was published by the PRA on the 12th November 2025.

The proposals in this PS will come into effect on 1 January 2026.

The PS responds to CP2/25, which was published in March 2025. It also contains final policy relating to the retail deposits threshold for application of the LR requirement. Specifically, this proposal aims to address unintended regulatory tightening caused by nominal GDP growth in the UK since the implementation of the original threshold in 2016.

Key Takeaways:

• The initial suggestion to increase the retail deposits threshold from £50 billion to £70 billion has been called & raised, with a confirmed increase to £75 billion.
• The metric of a firm’s retail deposits which is compared to the threshold will now be calculated using a three-year moving average as opposed to a point-in-time value. This adjustment has been made after specific considerations for building societies’ capital planning capabilities, providing more visibility and adaptability.
• To mitigate regulatory tightening in future, the PRA is considering a wider approach to indexing thresholds.
• The £10 billion threshold for non-UK assets remains the same as it was implemented in 2023, meaning the material change to nominal UK GDP is not material in this context.
• The PRA dismissed claims that building societies should be removed from the scope of the LR requirement, adhering to the judgement of the FPC.