Bank bonuses have surged to their highest levels since the 2008 financial crisis, with an estimated £25 billion paid out in the financial year concluding March 2026. This figure, representing a 16% annual increase, has reignited debate over the fairness of banking profits amidst the ongoing cost of living crisis and has prompted calls for a significant increase to the bank surcharge tax.
Analysis by the Trades Union Congress (TUC) highlights that these payouts represent the highest cash terms and real-terms quarter since the global financial downturn. This comes as the UK banking sector reported substantial profits, with the 'big four' banks alone making £45.7 billion in 2025. The TUC suggests that the wider banking sector's profits are now 40% higher than in the period leading up to the 2008 crisis, arguing there is ample capacity for banks to contribute more to public finances.
The TUC is advocating for reforms to the bank surcharge tax, an additional 3% corporation tax on bank profits exceeding £100 million, which was initially introduced in 2016 at 8% but reduced in April 2023. They propose that increasing this surcharge could generate substantial funds, ranging from £9 billion over four years by simply reversing the 2023 cut, to £60 billion over the same period if set at 35% – a level comparable to the windfall tax imposed on energy companies.
These potential funds, the TUC argues, could be used to establish a permanent social energy tariff, providing a crucial lifeline for low and middle-income households. Such a scheme could cut annual energy bills by up to £559 for eligible households, offering much-needed relief as rising costs continue to impact household budgets across the country.
Critics, including Sara Hall, co-executive director at research group Positive Money, contend that banks have significantly benefited from higher interest rates on loans and mortgages in recent years, without adequately redirecting these windfall profits to struggling households or businesses. Paul Nowak, General Secretary of the TUC, emphasised that banks are 'making a killing' from higher interest rates and 'mortgage misery,' underscoring the perceived urgency for the government to act.