Britain’s banks paid staff £16.4 billion in bonuses between January and March this year, the highest quarterly total since the run-up to the 2008 financial crisis. The figure comes from a Trades Union Congress (TUC) analysis of Office for National Statistics (ONS) data, released as the union body demands a bigger tax on bank profits.
The TUC timed its analysis to land hours before Chancellor Rachel Reeves addresses the City at her annual Mansion House speech on Tuesday evening. Its argument is simple: banks can afford to pay more, and stretched households should see the difference on their energy bills.
A First-Quarter Bonus Pool Not Seen Since the Crash
The £16.4 billion figure is part of a bigger number. The TUC’s analysis found £25 billion was paid in bonuses to around 1.1 million workers across Britain’s finance and insurance industry in the year to March, meaning close to two-thirds of the entire annual pool landed in a single quarter.
That timing is not an accident. January to March is when most banks finalize and pay out annual bonus rounds for senior staff and traders, once full-year results are locked in. Spread evenly across the sector’s 1.1 million workers, the annual total would work out to roughly £22,700 each, though the TUC notes the real distribution is skewed heavily toward top traders and dealmakers who can command far larger individual payouts.
Separate disclosures show how that skew plays out in the executive suite. Charlie Nunn, chief executive of Lloyds Banking Group, received a package worth £7.4 million for last year, of which £4 million came as bonus. Paul Thwaite, chief executive of NatWest, received a £6.5 million package for 2025 that also included £4 million in bonuses.
| Executive | Bank | 2025 Total Package | Bonus Portion |
|---|---|---|---|
| Charlie Nunn | Lloyds Banking Group | £7.4 million | £4 million |
| Paul Thwaite | NatWest | £6.5 million | £4 million |
Both figures sit well above the sector average, illustrating the gap between headline bonus totals and what most finance workers actually take home. The underlying wage and bonus data comes from the ONS series tracking bonus payments across finance and business services, which the TUC used to build its wider case.
The Case for a Bigger Bank Tax
Britain’s big four banks, Barclays, HSBC, Lloyds and NatWest, made combined profits of £45.7 billion in 2025. The TUC argues that scale of profit, paired with record bonuses, makes the case for reversing a tax cut made three years ago.
The union body wants the government to raise the bank surcharge, a levy on top of standard corporation tax that applies only to banking profits. It has laid out three options in its bank taxation analysis published this year: an 8% surcharge, which it calls the bare minimum, would raise £9 billion over four years; a 16% rate would raise £24 billion; and a 35% rate, matching the level applied to energy company profits during the last windfall tax, would bring in £60 billion over four years. A TUC-commissioned poll found roughly three-quarters of the public back a windfall tax on bank profits, including 76% of people who voted Conservative in 2019.
Every time there is talk of taxing banks, some of the richest people in the country start whining and try to claim they can’t afford to pay any more. But the big banks are making a killing off the back of higher interest rates and mortgage misery across the country.
Paul Nowak, the TUC’s general secretary, said banks “can well afford to pay more tax,” and called a higher surcharge “a long overdue common-sense solution.” He said the government should use the proceeds to cut people’s energy bills.
Mortgage Misery Meets Record Payouts
“Record bonuses to celebrate record profits,” said Sara Hall, co-executive director of the campaign group Positive Money. “The cost of living crisis must be something of a fantasy to City bankers.”
Hall argued that banks “aren’t redirecting the windfall profits they’ve made from higher interest rates towards the households or businesses struggling to pay them,” which she said leaves it to government to do so “in their stead.” She also pointed to Andy Burnham, the mayor of Greater Manchester, saying he “is being handed a rare opportunity to rebalance the scales in the public’s favour” and should “seize the chance to implement this popular policy that won’t cost the Government a penny.”
The households on the other side of that argument are contending with several pressures at once.
- Mortgage costs – years of higher interest rates have pushed up repayments for borrowers rolling off fixed-rate deals.
- Energy bills – the TUC wants surcharge revenue to fund a permanent social tariff for lower-income households.
- Wage growth – living standards have risen slowly in the years since the 2008 crash, economists say.
- Public debt – the bailout years left a legacy of higher borrowing that fed years of spending cuts.
Those four pressures are the backdrop the TUC is leaning on to argue its case has never been stronger.
Echoes of the Pre-Crash City
The comparison to 2008 is deliberate. In the years before the crash, City bonuses reached similar scale, funded by a lending and trading boom that collapsed when the financial system seized up. The government was forced to inject tens of billions of pounds into bailing out banks, a rescue that helped drive public sector debt sharply higher and fed years of spending cuts and tax rises that followed.
The bank surcharge itself carries scars from that era. Introduced after the crash specifically to claw back some of the cost of the bailouts, it stood at 8% for years and, according to TUC figures, raised more than £13 billion in total. The previous Conservative government cut it to 3% in April 2023, shrinking the annual take to roughly £1.3 billion. Parliament has debated reversing that cut before, including in a 2023 Commons session on bank profits and a potential windfall tax, without the rate moving.
Eighteen years on from the crash, bonuses are back at their old scale. The tax rate built to answer for that era is not.
Could a Bigger Levy Backfire on Britain’s Banks?
Not everyone agrees a bigger surcharge is safe to impose. The banking industry warns that raising it again could shrink lending and push financial firms to book business elsewhere, an argument the TUC and campaigners reject as self-serving given the scale of current profits.
UK Finance, the industry’s trade association, has argued a higher levy would make Britain a less competitive place to run a bank. Barclays chief executive C.S. Venkatakrishnan has warned that a new tax could curtail lending capacity and dent investor confidence at a moment when the government is trying to boost growth. In 2025, UK bank shares lost roughly £8 billion in combined market value after an earlier round of windfall tax proposals surfaced, a reaction the industry points to as proof investors take the threat seriously.
- Unions and campaigners say banks are pocketing a windfall from years of higher interest rates that should be redirected to struggling households.
- UK Finance warns a bigger levy would weaken Britain’s standing as a global financial centre.
- Bank executives, including Barclays’ Venkatakrishnan, say the risk is less lending and less investment just as growth is the government’s stated priority.
The TUC’s own rebuttal, laid out in a blog explaining its case for taxing windfall bank profits, argues that much of the current profit boom traces back to interest the Bank of England pays lenders on reserves built up during quantitative easing, a cost that falls on taxpayers regardless of what banks do with the proceeds. Whether that counts as a genuine windfall or simply the ordinary reward for higher rates is where the two sides fundamentally split.
What Tuesday’s Mansion House Speech Could Bring
Reeves used last year’s Mansion House address to unveil the government’s Financial Services Growth and Competitiveness Strategy, a package of reforms aimed at loosening regulation and attracting investment, details of which are set out in her 2025 Mansion House speech. That growth-first framing sits awkwardly next to union demands for a higher bank tax, and it is not yet clear which impulse wins out this time.
The TUC is betting that record bonus and profit numbers, released just hours before Reeves speaks, will shift the political weather. For now, the surcharge sits at 3%, and the Chancellor has given no public sign she plans to move it before she takes the stage Tuesday night.
Frequently Asked Questions
What Is the UK Bank Surcharge?
The bank surcharge is an extra tax on top of standard corporation tax that applies only to banking profits above £100 million. It stood at 8% for years before the previous Conservative government cut it to 3% in April 2023, a change TUC analysis says previously raised more than £13 billion and now brings in roughly £1.3 billion a year.
Why Do Bank Bonuses Peak Between January and March?
Most banks finalize annual bonus rounds for senior staff and traders in the first quarter, once full-year results are locked in. That is why £16.4 billion, close to two-thirds of the entire year’s £25 billion bonus pool, landed in just three months.
How Much Would Each of the TUC’s Tax Options Raise Per Year?
Spread evenly, the TUC’s smallest proposal, reversing the cut back to 8%, works out to roughly £2.25 billion a year. The 16% option comes to about £6 billion a year, and the 35% option, matching the rate applied to energy company profits, comes to around £15 billion a year, based on its own four-year totals.
Do the Banks Support a Windfall Tax?
No. UK Finance and bank executives including Barclays’ C.S. Venkatakrishnan have warned a bigger levy would weaken Britain’s competitiveness as a financial centre, and bank shares lost roughly £8 billion in combined market value in 2025 after similar proposals surfaced.
Will the Government Actually Raise the Bank Surcharge?
There is no confirmation either way. The Treasury has resisted previous union calls to raise the surcharge, and the rate has stayed at 3% since 2023, though the TUC hopes renewed pressure ahead of the Mansion House speech will change that calculus.
