Money Covered: The Week That Was – 2 October 2026

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

Headline development 

The Institute of Chartered Accountants in England and Wales (ICAEW) warns over rising simple assessment letters

On 21 September 2026, the ICAEW warned a record 1.8m taxpayers in the UK that they could receive a “simple assessment” tax bill from HMRC this year. Simple assessment letters, also known as PA302s, are sent to people who are not in self assessment but have underpaid tax that cannot be collected through PAYE. They often relate to tax due on the state pension and interest from banks and building societies.

His Majesty's Revenue and Customs (HMRC) issued around 675,000 of these simple assessment letters five years ago, but numbers have climbed sharply. The ICAEW points to several drivers, including the personal allowance remaining frozen at £12,570, the effect of the state pension triple lock, and higher interest rates since the COVID-19 pandemic. 

The ICAEW has urged taxpayers to check any letter received from HMRC carefully and query anything that looks wrong. Some recipients have already been contacted, with a further round linked to bank and building society interest expected between October and December 2026. 

The due date for paying the simple assessment tax bill for the period of 2025/26 is 31 January 2027, unless stated otherwise on the letter.

To read more, please click here. 

Auditors 

Prudential Regulation Authority (PRA) letter on review of 2026 auditor's report

The PRA published a letter on 30 September setting out thematic feedback from its review of auditors’ annual reports on International Financial Reporting Standards (IFRS 9), expected credit losses (ECL) for major UK-headquartered banks and building societies (submitted under the PRA Rulebook requirements). While addressed to banks, the themes are relevant to any firm applying IFRS 9 to material credit exposures, including insurers with significant debt portfolios, loans and other credit-risk assets.

The key themes emerging from the PRA’s review include:

• Data governance: auditors generally reported that firms have maintained effective governance and controls over ECL data, but with differing levels of maturity and consistency across firms. The PRA encourages further strengthening of (1) identification of “material” ECL data, (2) end-to-end accountability for data through the ECL process, (3) data quality controls, and (4) data lineage - being able to evidence where data comes from and how it is transformed.
• Model risk and responsiveness to emerging risks: the PRA notes ongoing progress in model redevelopment and enhanced model monitoring, but implementation remains uneven. Areas of emphasis include how quickly models and processes respond to emerging risks, the completeness and appropriateness of post-model adjustments and ensuring monitoring can identify performance issues early enough to support timely mitigating action.
• Climate-related credit risk in ECL: the PRA welcomes further progress in incorporating climate-related credit risk into ECL, aligning with updated supervisory expectations. It encourages continued development of more granular climate risk assessments, stronger links between scenario analysis outputs and ECL judgements and the data and modelling capability needed to reflect evolving climate-related credit risks.

The PRA has included an annex to their letter intended to help firms benchmark their practices and identify priorities for improvement. For the PRA’s 2027 review, auditors will be asked to comment on firms’ progress across the above areas, and firms are encouraged to perform their own self-assessment and share it with their auditors. The PRA is also asking auditors to provide views on how firms identify and monitor credit risks in private market exposures, and how they reflect changes in ECL on a timely basis - highlighting practical challenges around exposure identification/aggregation and timely, reliable data for complex, leveraged and correlated risks. The PRA describes this as forward-looking work to support cross-firm analysis rather than a finding from the current review.

To read the letter, please click here.  

Regulatory developments for FCA regulated entities 

Financial Conduct Authority (FCA) publishes retirement income market data for 2025/26

On 24 September 2026, the FCA published its retirement income market data for 2025/26. The FCA reported that the total number of pension plans accessed for the first time increased by 7.4% to 1,047,008 in the year ending 31 March 2026, compared with 974,990 in the previous year. The FCA also found that the number of plans entering drawdown increased by 10.5% to 401,137 in the year ending 31 March 2026. In 2025/26, 64.5% of those who entered drawdown took a Pension Commencement Lump Sum, compared with 61.9% in the previous year. Annuity purchases increased by 13.2% to 100,144, compared with the previous year. 

Furthermore, the FCA found that the proportion of pension pots accessed through full encashment fell to 45.8%, compared with 47.4% in the previous year, although full encashment remained the most common way of accessing a pension pot. The FCA found that the number of Defined Benefit to Defined Contribution transfers continued to fall, decreasing to 6,083 in the year ending 31 March 2026, compared with 6,418 in the previous year. Also, the proportion of pension plans accessed for the first time by plan holders who took regulated advice remained broadly unchanged at around 30%. Overall, the total value withdrawn from pension pots increased by 21.7% to £91,236m in the year ending 31 March 2026.

To read the FCA's retirement income market data for 2025/26, please click here. 

UK Crypto Regulations: Financial Conduct Authority (FCA) finalised guidance on overall risk assessments  

On 30 September 2026, the FCA published two sets of finalised guidance on overall risk assessment requirements under the new prudential framework for regulated crypto asset firms.

1) Non-Handbook Guidance on COREPRU 7: Overall Risk Assessment (FG26/9) sets out the FCA’s expectations for the overall risk assessment under the new core prudential sourcebook (COREPRU), including how the assessment should be completed, the supporting documentation firms should maintain, and how it will feed into the FCA’s supervisory review and evaluation process (SREP).

2) Non-Handbook Guidance on CRYPTOPRU 7: Overall Risk Assessment for CRYPTOPRU Firms (FG26/10) explains how those requirements apply specifically to firms carrying on cryptoasset activities under the new prudential sourcebook for firms (CRYPTOPRU).

These guidance notes take effect on 25 October 2027. Ahead of that, firms intending to continue operating in the UK will need to apply for authorisation by 28 February 2027. Authorisation will not be automatic, firms will need to demonstrate compliance with applicable FCA standards, including in areas such as consumer protection, safeguarding, market integrity and financial resilience. The FCA is supporting readiness through pre-application engagement and webinars.

To read the FCA's finalised guidance, please click here and here. 

With thanks to this week's contributors: Lauren Butler, Haiying Li, Daniel Parkin, Dorian Nunzek, David Allinson and Rachael Healey.

If you have any queries please do get in contact with a member of the team, or your usual RPC contact.