The amount of time that senior bankers must now wait before receiving their full amount of bonus – a bonus deferral period - will be cut from eight to four years.

The proposals bring the UK more closely in line with many other major jurisdictions, said the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The new rules will come into force on 16 October 2025, in time for 2025 pay awards and any other awards made but not yet fully paid.

Following industry feedback, these changes go further than original proposals announced last year.