On 7 October 2026, the PRA published Consultation Paper CP13/26 - Updating regulatory thresholds: An autopilot approach, proposing a new framework for the automatic indexation of regulatory thresholds across the PRA Rulebook and PRA guidance.

The proposal is intended to address what the PRA describes as "prudential drag": the gradual tightening of regulation that can occur when fixed monetary thresholds remain unchanged while prices and the wider economy grow. Under the proposed framework, selected thresholds would instead increase periodically in line with UK nominal GDP. The PRA has identified 128 thresholds for inclusion in the initial framework.

For non-systemic UK banks, the proposals are particularly relevant. Thresholds currently determine, among other things, eligibility for the Small Domestic Deposit Takers (SDDT) regime, regulatory reporting requirements, Pillar 2 processes, operational continuity requirements, trading-book treatment, liquidity requirements and a range of exposure-level prudential treatments.

Key timing

None of these thresholds changes immediately as a result of CP13/26. If the framework is finalised, the PRA proposes that the first automatic adjustment take effect on 1 July 2031, followed by updates every five years. Responses to both the consultation and the associated discussion paper are due by 7 February 2027.

1. Automatic Indexation Framework - Overview

At present, the PRA generally reviews individual regulatory thresholds on an ad hoc basis. CP13/26 would replace that approach, for eligible thresholds, with a common rules-based methodology.

The proposed framework has several core features:

UK nominal GDP would be the indexation metric. The PRA considers this preferable to inflation alone because nominal GDP captures both changes in prices and real economic growth.
2026 would be the fixed base year.
Each threshold would have a base amount, which would be multiplied by the change in nominal GDP between the base year and the relevant reference year.
The calculated amount would be rounded to two significant figures.
A high-water mark would apply: automatic indexation could increase a threshold, but would not reduce it if nominal GDP subsequently fell.
The first automatic adjustment would take effect on 1 July 2031, after an initial three-year indexation period, with subsequent adjustments every five years.
Firms would receive advance notice, including a proposed six-month implementation window before updated values become effective.

Simplified formula

Indexed threshold = Base amount x (UK nominal GDP in reference year / UK nominal GDP in 2026). The operative threshold would then be the higher of the rounded indexed amount and the previous threshold.

2. Key Changes: High-level Summary:

For non-systemic banks, five aspects of the proposal are particularly important.

1. Regulatory perimeter thresholds would move with the economy. Firm-size thresholds that determine entry into or exit from proportionate regimes would no longer remain nominally fixed indefinitely. This is particularly relevant to the SDDT regime and other requirements where crossing a threshold creates a material step-up in regulatory obligations.

2. Reporting thresholds are a major part of the package. The PRA has identified 52 reporting thresholds in the proposed framework, of which 42 apply to the banking sector.

3. Indexation would apply at both firm and exposure level. The framework is not limited to balance-sheet-size thresholds. It also covers thresholds relating to individual mortgage loans, CIU exposures, large exposures, trading-book activity, derivative activity and other prudential calculations.

4. Not every relevant threshold is being put on "autopilot" yet. The PRA has created a separate Discussion Paper (DP) population for thresholds where indexation may create greater modelling, systems, governance or cross-regulatory complexity. These thresholds are not currently proposed for automatic indexation. They include a number of IRB, liquidity, remuneration and governance thresholds.

5. Existing policy reviews continue separately. Automatic indexation would not replace the PRA's ability to change a threshold through normal policymaking where its underlying calibration or risk appetite needs to change.

3. Detailed Analysis for Non-Systemic UK Banks:

3.1. SDDT and Strong and Simple - Protecting the Proportionality Boundary

One of the clearest implications for smaller banks is the proposed inclusion of the SDDT eligibility thresholds.

Appendix 3 includes the £20 billion total-assets criteria in SDDT Regime - General Application 2.1(1)(a) and (b), together with the £44 million trading-book threshold in 2.1(3).

This is significant because a bank whose balance sheet grows broadly in line with the wider economy could otherwise cross a fixed £20 billion threshold over time despite there being little change in its relative scale or systemic importance.

3.2. Regulatory Reporting and Pillar 2 - Potentially the Most Immediate Operational Benefit

Reporting thresholds represent the largest single category in the PRA's proposal.

For banks, Appendix 3 includes numerous thresholds governing Capital+ reporting, Reporting (CRR), large-exposure reporting and other reporting requirements. Of particular relevance to smaller and mid-sized banks are multiple £5 billion total-asset thresholds, including Reporting Pillar 2 and Capital+ reporting requirements.

The practical benefit is not necessarily a reduction in today's reporting burden. Rather, indexation could delay an increase in scope or frequency that would otherwise arise simply because nominal balance sheets have grown with the economy.

3.3. Credit Risk, Market Risk and Large Exposures

For banks, CP13/26 is also relevant below the level of the overall balance sheet.

Proposed Rulebook thresholds include, among others:

£260 million and £88 million derivative-business thresholds for simplified counterparty credit-risk methodologies;
£2.6 million individual mortgage-loan thresholds for property valuation requirements;
£500 million of CIU exposures;
£130 million for specified exposures to institutions or investment firms under the large-exposures framework;
£440 million of business subject to market risk;
a £44 million small trading-book threshold; and
£8.8 million for certain exclusions from prudential consolidation.

These thresholds may be particularly important for specialist banks whose regulatory treatment is affected by the composition of their activities rather than simply their total balance-sheet size.

A further set of credit-risk thresholds remains under discussion. Appendix 5 includes, for example, the £44 million SME turnover definition, £880,000 retail/SME exposure thresholds, various IRB inputs and an £880,000 Standardised Approach exposure threshold.

3.4. Liquidity - A Split Between Proposed and Discussion-Paper Thresholds

Liquidity is another area where the PRA has deliberately taken a mixed approach.

Thresholds proposed for indexation include:

£5 billion total assets in Liquidity (CRR) Article 414(3);
£440 million of CIU exposures under Article 416(5);
£440 million of shares or units in CIUs under the LCR framework; and
a £440,000 total deposit balance threshold for certain other retail deposit outflows.

Other liquidity thresholds remain in the Discussion Paper. These include the £880,000 threshold used in the definition of certain retail deposits and stable-funding treatment, covered-bond and corporate-security issue-size thresholds of £220 million or £440 million, and an £88 million Level 2B securitisation tranche threshold.

For banks with material wholesale funding or HQLA portfolios, these DP thresholds merit particular attention because changing them can affect asset classification and systems logic rather than merely determining whether the firm as a whole falls within a regime.

4. What Should Non-Systemic Banks Do Now?

Although the first automatic adjustment is not proposed until 2031, CP13/26 is relevant to current regulatory planning.

Banks should consider:

Creating a consolidated threshold inventory. Identify every proposed and discussion-paper threshold applicable to the firm, including exposure-level thresholds embedded within credit, liquidity and reporting systems.
Assessing proximity to key boundaries. Particular attention should be given to the £5 billion, £10 billion, £20 billion and £26 billion firm-level thresholds, alongside activity-specific limits relevant to the bank's business model.
Separating CP thresholds from DP thresholds. The former are proposed for automatic indexation; the latter remain subject to further policy consideration.
Reviewing systems architecture. Where regulatory amounts are hard-coded in reporting, risk or treasury systems, firms should consider whether future threshold values can be parameterised and governed centrally.
Integrating threshold changes into growth planning. A bank's absolute balance-sheet growth is no longer sufficient to determine when a boundary might be crossed; what matters increasingly will be growth relative to the nominal economy and any separate PRA policy recalibration.
Considering consultation feedback.

The consultation and discussion-paper response deadline is 7 February 2027.

Appendix - CP13/26 Thresholds Relevant to Non-Systemic UK Banks

Scope note: This appendix filters the PRA's Appendices 3-5 for thresholds capable of being relevant to UK banks. Credit-union-only and insurance-only thresholds have been excluded. Investment-firm-only thresholds have also been excluded. Higher-value thresholds are retained where the underlying rule applies to banks generally, even where most non-systemic banks are currently well below the boundary.

A. Thresholds Proposed for Automatic Indexation

A1. PRA Rulebook thresholds

PRA ID(s)	Rule / threshold	Current amount / base amount
1	Counterparty Credit Risk Art. 273a(1)(b) - simplified method: derivative business	£260m
2	Counterparty Credit Risk Art. 273a(2)(b) - simplified method: derivative business	£88m
3	Credit Risk Mitigation Art. 208(3)(b) - individual mortgage loan	£2.6m
4	IRB definition of large financial sector entity - total assets	£79bn
5-6	Standardised Approach Art. 124D - individual mortgage-loan valuation thresholds	£2.6m
7	Standardised Approach Art. 132(8)(a)(ii) - CIU exposures	£500m
8	Large Exposures Arts. 395/396 - exposures to institutions/investment firms	£130m
9	Market Risk Art. 325a(1)(b) - business subject to market risk	£440m
10	Trading Book Art. 94(1)(b) - small trading-book derogation	£44m
11	Credit Valuation Adjustment Risk 6.1(1) - non-centrally cleared derivatives	£88bn
12	Groups Art. 19(1)(a) - assets/off-balance-sheet items for exclusion from prudential consolidation	£8.8m
13	Reporting Pillar 2 - 2.9 - total assets	£5bn
14-15	SDDT Regime - General Application 2.1(1)(a)/(b) - total assets	£20bn
16	SDDT Regime - General Application 2.1(3) - trading-book business	£44m
17	Operational Continuity 1.1(1) - total assets	£10bn
18	Operational Continuity 1.1(2) - safe custody assets	£10bn
19	Operational Continuity 1.1(3) - received sight deposits	£350m
20-22	Regulatory Reporting - Capital+ reports 20.10(2), 20.10A and 20.11 - total assets	£5bn
23/25/27/29	Capital+ 20.6(1)-(4) - retail deposits	£50bn
24/26/28/30	Capital+ 20.6(1)-(4) - total assets	£320bn
31/44	Capital+ 20.7(2) and 20.9(2) - total assets	£50bn
32/35/38/41	Capital+ 20.8(1)-(4) - total assets	£5bn
33/36/39/42	Capital+ 20.8(1)-(4) - retail deposits	£50bn
34/37/40/43	Capital+ 20.8(1)-(4) - total assets	£320bn
45-48	Regulatory Reporting - Regulated Activity Groups 1 and 3 - total assets	£5bn
49	Regulatory Reporting 26.1(1) - total assets	£50m
50	Reporting (CRR) Art. 14(3) - exposures / large-exposure reporting	£260m
51	Reporting (CRR) Art. 15(6)(a) - credit-derivatives volume	£260m
52	Reporting (CRR) Art. 15(6)(b) - credit-derivatives volume	£440m
53	Resolution Assessment 1.1 - retail deposits	£100bn
54-55	Liquidity Art. 414(3)(a)/(b) - total assets	£5bn
56	Liquidity Art. 416(5) - CIU exposures	£440m
57	LCR Art. 15(1) - shares/units in CIUs	£440m
58	LCR Art. 25(2)(a) - total deposit balance	£440k
59	Reporting (CRR) Art. 15(5) - total notional value of derivatives	£8.8bn
77-78	Auditors 8.2(3)(a)/(b) - balance-sheet total	£50bn
79	External Audit 1.3 - small-firm definition	Score of 100
80	Glossary - definition of "large institution" - total assets	£26bn
83	Glossary - definition of "small and non-complex institution" - total assets	£4.4bn
84	Notifications 2.3B(1) - total assets	£50m

A2. PRA guidance thresholds

PRA ID(s)	Rule / threshold	Current amount / base amount
118	SoP5/15 and SoP5/25 - Pillar 2 capital methodology	2,200,000 formula factor
119*	SS5/21 - International Banks: branch and subsidiary supervision - total gross assets	£15bn
120	SS13/16 - high-net-worth BTL borrower: annual net income	£300k
121	SS13/16 - high-net-worth BTL borrower: net assets	£3m
124	SoP5/15 - Pillar 2 methodology - total assets	£5bn
125	SS28/15 - Strengthening individual accountability in banking - total assets	£15bn

B. Bank-Relevant Thresholds Under Discussion - Not Currently Proposed for Automatic Indexation

B1. Credit risk

DP ID(s)	Threshold	Current amount
DP2	IRB Art. 178(2)(da)(i) - amounts past due owed by an obligor	£440
DP3	Glossary definition of SME - annual turnover	£44m
DP4	IRB Art. 147(4C)(b)(ii) - annual revenue	£440m
DP5	IRB Art. 147(5)(a)(ii) - retail SME exposure	£880k
DP6	IRB Art. 147(5A)(c) - exposure to a single individual	£90k
DP7	IRB Art. 153(4) - annual turnover	£44m
DP8	IRB Art. 153(4) - annual turnover	£4.4m
DP9-10	Standardised Approach Arts. 123/123A - amount owed excluding residential real estate exposures	£880k
DP11	IRB Art. 153(4) formula	Factor 44
DP12	IRB Art. 153(4) formula	Factor 4

B2. Governance, accountability and remuneration

DP ID(s)	Threshold	Current amount
DP13	Allocation of Responsibilities - definition of small CRR firm	£250m gross total assets
DP14	General Organisational Requirements - whistleblowing	£250m gross total assets
DP15	SS28/15 - individual accountability in banking	£10bn gross total assets
DP16	Senior Management Functions 3.6A(1)	£10bn gross total assets
DP17-18	Remuneration 16.3/16.4 - total assets	£50bn
DP19 / DP22	Remuneration proportionality thresholds	£4bn average total assets
DP20 / DP23	Remuneration proportionality thresholds	£20bn average total assets
DP21	SS2/17 remuneration	£50bn average total assets
DP24	Definition of small trading book for remuneration	£50m
DP25 / DP27-30	Individual remuneration thresholds	£660k
DP26	Remuneration benchmarking reporting	£50bn total assets
DP32	SS28/15 - individual accountability in banking	£250m
DP33	SS39/15 - whistleblowing	£250m assets
DP35-36	Remuneration - trading-book business	£44m
DP37-39	Remuneration thresholds	£660k

B3. Liquidity

DP ID(s)	Threshold	Current amount
DP43	Liquidity Art. 411(2) - SME/company deposits in definition of retail deposit	£880k
DP44	Liquidity Art. 428(1)(g)(ii) - SME/company deposits for stable funding	£880k
DP45	LCR Art. 10(1)(f)(iv) - extremely high-quality covered-bond issue size	£440m
DP46	LCR Art. 11(1)(c)(iv) - high-quality covered-bond issue size	£220m
DP47	LCR Art. 11(1)(d)(vii) - third-country covered-bond issue size	£440m
DP48-49	LCR Arts. 11(1)(e)(ii) / 12(1)(b)(ii) - corporate-debt-security issue size	£220m
DP50	LCR Art. 12(1)(e)(iv) - high-quality covered-bond issue size	£220m
DP51	LCR Art. 13(11) - Level 2B securitisation tranche issue size	£88m