Find out how we assess the benefits of our work in our positive impact report.
As the regulator of financial services, we must be accountable to the public and businesses, and demonstrate the value of our actions.
Our estimates of positive impact are published in the FCA’s Annual Report and Accounts. Read this year’s report[1].
From 2022 to 2025, we published standalone positive impact reports. Read our previous reports:
We updated the current methodology in our Positive Impact 2025[2].
This page explains more about how we produce these estimates.
How we estimate positive impact
Counting benefits from rulemaking
We base our estimates on quantified benefits in cost benefit analyses (CBAs) we publish alongside consultation papers (CP) and policy statements (PS).
In line with our Statement of Policy on CBA[6], we assess the impact of each intervention over a 10-year period. This is the expected ‘lifetime’ of the policy.
Some rules remain in place for longer and continue to deliver benefits. However, we face increasing uncertainty beyond 10 years as markets, technology, and regulation evolve. A consistent 10-year period allows us to compare policies on a common basis.
We report total benefits in ‘present value’ terms. This means we discount future benefits by 3.5% a year and combine them into a single 10-year present value – which we then convert into an annual figure. This represents the constant yearly benefit that would have the same value as the 10-year total.
This approach aligns the positive impact figures with how we assess impacts in our CBAs. We explain more about annualisation in Chapter 13[7] of our Statement of Policy on CBA.
Enforcement benefits
We exclude enforcement benefits from our overall estimates and benefit-cost ratio to avoid double counting.
Our CBA estimates assume firms comply with our rules.
Where firms don’t comply, enforcement action aims to stop harm and restore the intended benefits from those rules. In many cases, these restored benefits will already be reflected in the original CBA estimates.
Timing and implementation
We take our estimates of benefits from the CBAs that accompany PSs.
We first publish a CBA alongside a CP. Depending on consultation feedback, we may revise our proposals before finalising the rules, and updating the CBA in the PS.
The benefit estimates used in our positive impact figures come from these final CBA estimates.
Policies are typically implemented a few months after we publish the PS.
In our 2022 to 2025 reports, we treated the PS publication date as the point when benefits began. From 2026, we instead use the implementation date as the starting point. This better reflects when the effects of a policy are likely to occur in practice.
Inflation adjustments
CBAs present benefits in prices at the time of the consultation.
To allow comparison across policies, we restate all figures in current prices using the Treasury’s latest available GDP deflators[8]. As a result, the figures in our Positive Impact reports may be higher than those in the original CBAs.
We report gross benefits to the groups affected, typically consumers or wholesale markets. We don’t include costs, such as firms’ compliance costs. These are assessed separately in our CBAs.
We include only CBAs that quantify at least some benefits. We exclude cases where it was not possible or proportionate to quantify benefits. This means our estimates are likely to understate the total benefits of our interventions.
Limitations of our estimates
Not all rulemaking benefits can be quantified
Many benefits from financial regulation are difficult to measure in monetary terms.
We discussed these challenges in our Positive Impact 2022[5] and Positive Impact 2023[4] reports. These included the challenge of isolating the benefits from specific interventions, the reliance on assumptions, uncertainty over the time taken to reduce harm and data limitations.
Other public bodies face similar issues. Some have developed frameworks to capture a wider range of impacts, such as Total Economic Value (TEV). We’re exploring whether a similar approach could be applied to financial regulation to increase the share of quantifiable benefits.
We quantify benefits where possible to improve accountability and support comparison across interventions. However, we must act proportionately. In some cases, we prioritise acting quickly to stop harm rather than collecting further evidence to refine estimates.
Gathering additional evidence can also impose costs on firms and consumers. We therefore balance the value of better measurement against these costs.
Non-rulemaking activities are excluded
Our estimates focus on the benefits of new rules. These estimates capture the incremental impact of each intervention, assuming the wider regulatory framework is already in place.
We also carry out other activities, including authorisation, supervision, guidance and advocacy. We include these only where they directly support a rule with quantified benefits. Much of their value is not captured in our estimates.
As a result, our figures don’t reflect the full value of our work. The overall benefits of regulation, compared to an unregulated market, are likely to be significantly higher than the sum of individual rule changes.
Benefits of being a smarter regulator are not fully captured
Our approach is better suited to measuring the impact of new rules than improvements within the existing framework.
We can improve outcomes without introducing new rules, for example by strengthening supervision, improving the use of data, or making guidance clearer.
As these changes are not assessed through CBAs, we don’t include their benefits in our estimates.
