Money Covered: The Week That Was – 14 November 2025

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The fourth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at Employment Practices Liability insurance and its relationship to Directors & Officers insurance, is now available.

To listen to this and all previous episodes, please click here.

Headline development

BoE introduces systemic stablecoin strategy and consultation 

The Bank of England (BoE) has outlined its regulatory framework for the introduction of systemic stablecoins in its consultation dated 10 November 2025, which marks a pivotal development in the UK’s approach in this space. Systemic stablecoins are digital assets whose value is linked to established currencies to maintain price stability. 

The BoE's strategy aims to facilitate stablecoins in retail payments and wholesale settlements across the UK. Under the consultation framework, issuers of these stablecoins would be required to maintain strong capital and liquidity positions; back coins primarily with short-term government bonds, and; ensure users can redeem them at full value. 

The consultation framework also mandates stringent operational resilience, including rigorous cybersecurity, effective risk management, and transparent governance structures. Temporary holding limits for individuals (£20,000) and businesses (£10m) are suggested as the financial system adapts over time.  These measures are designed to mitigate risks such as financial instability, consumer loss, and operational failures, supporting trust and stability as digital assets become increasingly integrated into UK payments and settlements.

The consultation period runs until 10 February 2026. The BoE invites feedback from industry participants, consumer groups, and financial institutions to ensure the regulatory regime is proportionate and effective. By encouraging dialogue and collaboration, the BoE seeks to promote responsible innovation while protecting consumers and the integrity of the UK financial system. The consultation’s outcome is expected to shape future legislation and supervisory practices in digital finance.

To read the consultation, please click here.

Regulatory developments for FCA regulated entities

FCA's review of credit builder products

The Financial Conduct Authority (FCA) has reviewed a range of credit builder products – services that claim to help you improve your credit score by building a record of making payments. Whilst these products are often marketed to people with little or no credit history, the FCA found little evidence that they significantly improve credit scores.

The FCA warned that some products give a misleading picture of consumers' financial positions and encourage consumers to take on credit they cannot afford. The review also found that most firms offering these products were unregulated, and that these firms were failing to clearly explain the limitations and risks. The FCA's review has already led to several firms withdrawing or changing their offerings.

Before signing up for a credit builder product, the FCA urges consumers to consider whether these products really fit their needs and are worth the cost. The FCA encourages consumers to seek free, impartial advice from services such as MoneyHelper as an alternative.

To read more, please click here.

FCA reports on firms' risk assessment processes

The Financial Conduct Authority (FCA) conducted a multi-firm review in 2025, focusing on business-wide risk assessments (BWRA) and customer risk assessments (CRA), as part of its broader financial crime supervisory work. The review assessed how firms identify, understand, mitigate, and manage financial crime risks, as part of the FCA’s 2025–30 strategy. Firms assessed included building societies, platforms, custody and fund services, payments (e-money), and wealth management firms.

The survey's key findings centre around how firms go about:

1. Identifying, Understanding, and Assessing Risk 

The FCA found that most firms have a BWRA in place and that larger firms integrate risk assessment into business functions and aggregate results firm-wide. Some firms use both qualitative and quantitative data, tailored sub-factors, and weightings to assess inherent, control, and residual risks. There is effective linkage between risk appetite, BWRA, and CRA processes. However, often BWRAs are lacking detail, missing quantitative analysis, or unclear processes. Some focus mainly on fraud or generic risks, neglecting money laundering, sanctions, anti-bribery, proliferation financing, and terrorist financing. There is also often an oversimplification and failure to explain risk impact on the firm.

2. Mitigating Risk

The survey showed that financial crime risk is generally considered in strategy, growth, and product development, and that risk appetite is clearly linked to BWRA. Actions from risk assessments are documented and there is compliance capacity for current and future growth. There are often bad practices though in relation to the mitigation of risk, with business growth often outpacing risk assessment updates, and there is generally a lack of records or evidence of risk mitigation. Also, CRAs are not scaled or updated in line with business expansion.

3. Managing Risk

The survey found that there is strong governance and senior management oversight, with regular review and challenge of risk assessments. Discussions, changes, and approvals are documented, and firms have dynamic, regularly refreshed risk assessment models. However, at times there is a lack evidence of senior oversight and challenge, and insufficient documentation of senior management involvement. There is also a narrow focus and static approach to risk assessment.

The report suggests that stakeholders understand the specific risks faced by businesses and that they maintain robust financial crime systems and controls. Firms should regularly review and update risk-based approaches, and ensure risk assessments are comprehensive, tailored, and documented. The FCA also suggests that risk assessment outcomes are linked to business strategy and compliance capacity, and that senior management must actively oversee, challenge, and approve risk assessments. The FCA will continue to monitor firms and work with those where weaknesses are identified.

To read more, please click here.

FCA figures reveal home insurance still falling short on payouts

New data from the Financial Conduct Authority (FCA) shows that home insurers are still falling short when it comes to paying claims. In 2024, only around 70.7% of home insurance claims made on combined buildings and contents insurance policies were accepted. This figure is slightly down from the previous year (71.9%) with some insurers paying out on as few as half of all claims. By contrast, other insurance sectors, such as motor and pets, see payout rates above 90%, highlighting that home insurance continues to underperform. 

Consumer group "Which?" has filed a super-complaint with the FCA over poor claims acceptance rates and poor treatment of customers during the claims process. With the FCA having until 23 December to respond.

To read more, please click here.

FSCS Chief Executive gives statement on 2025 progress and future outlook

On 12 November 2025, Martyn Beauchamp, the Chief Executive of the FSCS, made a statement on the FSCS' progress and outlook for this financial year, and review of the 2026/27 levy forecast.

Beauchamp confirmed that so far in 2025, the FSCS has completed the transition of their claims service, bringing the majority of claims management and all customer call-handling in-house. It was confirmed that the 2025/26 levy remains as forecast in May 2025 at £356m and the FSCS does not anticipate any additional levies for firms. The FSCS also expects to pay slightly less in compensation over the year than anticipated in May, a decrease of 5% to £315m (from £332m). Beauchamp also confirmed that a key priority for the FSCS remains maximising recoveries, with close to £40m in recoveries anticipated by the end of 2025/26.

The early forecast of the total levy in 2026/27 is £342m, which represents a small decrease on 2025/26. This is based on a forecast of £294m in compensation costs for 2026/27. This decrease is based on a changing claims environment with lower forecasted compensation costs in the Investment Provision class, mainly driven by fewer claims against SIPP operators. Beauchamp confirmed that they will publish an update to the FSCS' budget, which will provide full details of our management expenses for 2026/27, which forms part of the overall levy.

To read more, please click here.

FCA issues warning to CFD providers after multi-firm review

The FCA announced on 13 November 2025 that contracts for difference (CFD) providers have been warned to provide fair value, after its multi-firm review found some CFD providers had not risen to the Consumer Duty. The FCA's review did find evidence of good practice, including firms simplifying fee structures and stopping investors who might not be able to shoulder losses from buying CFDs in the first place. However, the FCA also identified areas for improvement, including:

• not adequately considering consumer complaints or customer satisfaction as part of their fair value assessments;
• making little or no changes to their products or services in response to the Consumer Duty;
• applying varying levels of overnight funding charges without providing clear justification – the potentially significant charges often were not adequately disclosed; and
• charging overnight funding separately on matched long and short positions, incurring potentially significant ongoing charges with little benefit for the consumer.

The FCA has also published examples of good practices and areas for improvement for CFD providers. The FCA has confirmed they will, where necessary, engage directly with firms included in their review to drive improvements, and will also consider further work to address the issues identified.

To read more, please click here.

FRC reports on the transition to the UK Stewardship Code 2026

The UK Stewardship Code 2026 takes effect from 1 January 2026, introducing a streamlined two-part reporting model. The Financial Reporting Council's (FRC) guidance, “Preparing for the UK Stewardship Code 2026: applying insights from current reporting”, provides practical examples and insights drawn from high-quality reporting under the 2020 Code. The new reporting structure separates (1) Policy and Context Disclosure, submitted every fourth year, focusing on policies and organisational context and (2) Activities and Outcomes Report, submitted annually, demonstrating how the Code’s Principles are applied in practice. The revised approach aims to reduce reporting burdens while maintaining high standards and transparency. 2026 will be a transition year; existing signatories retain their status if they submit their first report to the updated Code during their usual application window.

It is expected that the reduced administrative burden and less frequent policy reporting allows organisations to focus annual efforts on stewardship activities and outcomes. Further, the separation of policy and activity reporting enables clearer demonstration of stewardship practices and their effectiveness. The report notes that the fundamentals of high-quality reporting remain, including effective engagement case studies, reporting of policies alongside evidence of implementation and oversight of external managers. The report provides examples relevant to different asset classes and organisational contexts, supporting tailored approaches.

The FRC’s optional guidance gives suggestions on information to include in reports, explains stewardship approaches, and addresses areas of greatest interest for example engagement, manager oversight, voting and stewardship in non-public equity. It also suggests using the transition year (2026) to familiarise teams with the new structure and expectations. The report suggests signatories ensure that annual reporting focuses on demonstrating real-world stewardship activities and outcomes, not just policies.

To read more, please click here.

Pensions

Industry calls for greater clarity on TPR’s new enforcement strategy

The Pensions Regulator’s (TPR) proposed new enforcement strategy has received broad support but also prompted calls for greater clarity, particularly on how it will apply to smaller schemes. 

In its consultation response, the Society of Pension Professionals (SPP) backed TPR’s risk-based approach but warned that prioritising cases by scale and impact could give the impression smaller schemes face less scrutiny. The SPP also cautioned that limited regulatory resources might focus enforcement on large or high-profile cases. Some members of the SPP further urged TPR to clarify how new surplus flexibilities under the Pension Schemes Act 2021 interact with existing criminal offences. 

The Association of Professional Pension Trustees has, similarly, supported TPR’s proposed new strategy but described the strategy as overly high-level, stressing the need for transparency, clear success measures, and adequate resourcing. 

Both groups agreed the approach aligns with TPR’s preventive, risk-based model but said detailed policies and communication will determine its effectiveness.

To read the TPR's enforcement strategy consultation, please click here. 

Tax practitioners

HMRC's AML supervision fees update 

HMRC will increase its anti-money laundering (AML) supervision fees from 1 December 2025 to reflect inflation and rising supervision costs.

Following a consultation launched in July 2025, HMRC received 478 responses, mainly from small businesses, many of whom raised concerns about affordability. As a result, HMRC has moderated some proposals: the fit and proper test fee will rise from £150 to £500 (instead of £700), and the application fee will be set at £300 (not £400), with refunds for eligible small firms. The premises fee will increase from £300 to £400, or £180 to £200 for small businesses, whilst the sanctions administration charge will rise to £2,000.

HMRC will also raise awareness of the Small Business Fee refund, which many eligible firms fail to claim. The government maintains that supervised businesses, not taxpayers, should cover the cost of AML regulation, and HMRC remains committed to strengthening its supervisory role.

To read the HMRC's policy paper on AML's supervision fees, please click here. 

First-Tier Tribunal upholds penalty notice against pension trustees

In New Internationalist Publications Ltd v Pensions Regulator [2025] UKFTT 1328 (GRC), the First-Tier Tribunal dismissed an appeal against a Penalty Notice of £12,500 issued by the Pensions Regulator. The Penalty Notice was issued to the Appellant for failure to complete a detailed value for members assessment annually as required under regulation 25(1)(b) and 25(1A) of the Occupational Pension Schemes (Scheme Administration) Regulations 1996. The Tribunal noted that the Appellant failed to comply with its legal obligation to complete the detailed value for members assessment by the 31 October 2023 deadline and took no steps to remedy the breach until contacted by the Pension Regulator in April 2024, with ignorance of legal obligations not constituting grounds for penalty reduction.

The Tribunal found that there were grounds to issue the Penalty Notice, which was not disputed by the Appellant. The Appellant submitted that there was no intention to breach any rules or regulations, however the tribunal decided that this was of no assistance to the Appellant as the Appellant's intentions were not relevant. The directors of the trustee company were required to have understanding and knowledge of the law relating to pensions and trusts to a degree which was appropriate for the purposes of enabling the individual properly to exercise the function as a trustee director. Ultimately, the tribunal found that the level of Penalty Notice was fair and reasonable and within the range permitted by the legislation.

To read the full decision, please click here.

With thanks to this week's contributors: Daniel Parkin, Dorian Nunzek, Damien O'Malley, Ben Simmonds, Haiying Li, James Parsons, and Lauren Butler