We have conducted an Equality Impact Assessment (EIA) following the 2025 annual pay review.
The purpose of this EIA is to assess the impact of the 2025 pay review, checking it did not unnecessarily disadvantage or inadvertently discriminate against any group protected by the Equality Act 2010.
While there is no legal requirement to conduct an EIA at this point, the assessment will help us analyse the impact on employees. It also demonstrates that we have taken on board the public sector equality duty (PSED). The PSED is a duty on public authorities to consider how their policies or decisions affect people who are protected under the Equality Act 2010.
1. Our 2025 pay review: summary
Our annual pay review is part of our employment offer. It is designed to provide fair, competitive pay at all levels and reward strong, consistent performance.
Performance-related pay increases were given to all eligible employees from 1 April 2025 based on their:
- End-of-year performance rating.
- Current salary position within the 2025 pay ranges.
Colleagues with the strongest performance, positioned lowest in the pay range, receive the biggest percentage base pay increase. This ensures their salaries progress at a faster rate, tackling longstanding concerns about fair pay progression and narrowing our pay gaps.
The key elements of our 2025 pay review included:
- Awarding colleagues who delivered a strong performance a salary increase of at least 2.25% and up to 6% if they significantly outperformed.
- Increasing the salary of those who are developing in role or need to improve by between 1% and 1.5%, with the opportunity for an uplift to the pay range minimum at the 2025 interim review stage, subject to improved performance.
- Variable increases to the pay range midpoints to make sure we remain aligned with the external market, with increases of up to 9.3% in some cases.
- Applying ‘maintained pay’ at the maximum of the pay ranges to help ensure that colleagues doing similar jobs within the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) are paid similarly.
Different pay awards were applied for apprentices, graduates and level 9 associates in the Supervision Hub.
Overall, the average base salary increase following the annual pay review in April 2025 across the FCA and PSR was 3.75%. In this EIA report we have rounded this to 1 decimal place, to 3.8%. This figure might increase slightly following the conclusion of the remaining deferred performance reviews and once the outcomes of the interim performance reviews have concluded.
2. Who is affected?
FCA and PSR employees who were eligible for the 2025 pay review.
3. Groups protected by the Equality Act 2010 likely to be affected
This Equality Impact Assessment is based on the impact of the 2025 pay review against the data that we hold on colleagues’ protected characteristics (age, disability, ethnicity, religion or belief, sex, and sexual orientation).
Where our analysis shows a disparity between the impact of the changes on a particular characteristic as compared with colleagues without that characteristic, we are satisfied that such disparity is a proportionate means of achieving a legitimate aim. Accordingly, we consider that no protected characteristic groups have been disproportionately or unfairly affected by the pay review in a positive or negative way.
For example, our younger employees received on average higher salary increases than our older employees. This is a result of factors such as our younger employees typically being positioned lower in their respective pay range and being awarded higher increases through the performance-related pay matrix. In addition, many of our younger colleagues are in the apprentice and graduate programmes and benefited from higher salary increases.
4. Key notes and assumptions
Data set
- The data set is based on a population of 5,118 colleagues who were eligible for the annual performance and pay review. Calculations are based on full time equivalent (FTE) values.
- The analysis is based on the impact of the changes against the data that we hold for colleagues’ protected characteristics (age, disability, ethnicity, religion or belief, sex, and sexual orientation). As seen in Figure 1 below, we do not have full characteristic disclosure for all colleagues.
- The data set is based on legal sex (as recorded on a colleague’s birth certificate or gender recognition certificate) as required by HMRC for payroll purposes. This is a binary field (male or female) and is used for the sex characteristic.
- The salaries considered are as of 1 April 2025. This includes a small number of adjustments to individual performance ratings following the conclusion of the end-of-year review process. No interim review salary uplifts are included in this analysis.
- Where there are fewer than 6 people an asterisk (*) is used to avoid identifying individuals.
Exclusions
- Colleagues with a deferred performance review or those not eligible for the annual pay review, such as colleagues who joined after 1 January 2025, have been excluded from this analysis.
- Contingent workers are also excluded from the analysis.
- The analysis excludes manager allowance from the comparisons on base pay. This is because the manager allowance is a legacy entitlement and is paid to a small number of employees as a separate allowance via flexible benefits.
Definitions
- Where ‘average’ is referenced in the analysis, this is the mean value.
- Executive directors and the chief executive are included within the director contractual grade category.
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Data table
5. Average salary increases
Figure 2 below summarises the average base salary increase awarded to our colleagues by protected characteristic, location and contractual grade.
The salary increase changes were calculated on the change to base pay. It does not take account of the additional pension contribution and flexible benefits accruing from salary uplifts.
The 2025 pay review saw an overall average salary increase of 3.8% across the total eligible population as of 1 April 2025. The resulting average salary is £73,588.
We provide more analysis against colleagues’ protected characteristics, location and contractual grade below.
5.1. Age
Younger colleagues received higher average base salary increases, with those aged 18 to 20 and 21 to 30 years old receiving average increases of 12% and 5.1% respectively. Many of our younger colleagues are part of the graduate programme and apprenticeship scheme, where salary increases were on average 10.8% and 12.2% respectively.
Colleagues in the younger age brackets typically tend to be positioned lower in their respective pay range. Through the application of the performance-related pay matrix, these colleagues will benefit from greater pay increases. Of colleagues aged 18 to 20, 78.8% were in the bottom third or below their respective pay range before any performance-related pay increase was applied. For those aged 21 to 30, this was 84.2%.
Colleagues in age groups from 41 to 50 and over 50 received the lowest average salary increase, at 3.4% and 3.1% respectively. This is largely driven by older colleagues being paid higher in their respective pay range. Those paid higher in their pay range are likely to benefit less from a performance-related pay increase. Colleagues paid at or above the pay range maximum were also subject to maintained pay in 2025, limiting any salary increases.
Of colleagues with a base salary over the pay range maximum before any performance-related pay increase was applied, 65.2% were aged over 50 and 27.5% between 41 and 50. Of the colleagues positioned in the upper third, 41.6% were over 50 and 37% were between 41 and 50.
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Data table
This chart shows the average base salary increase by age and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
Figure 4 shows the breakdown of the associate population into the 4 grade levels and by age bracket.
Associates aged 21 to 30 received slightly higher average salary increases than associates in the older age brackets. Associate level 8 colleagues, aged from 21 to 30, saw the largest average salary increase of 4.3%.
Typically, younger colleagues are positioned lower in their pay range and so receive the biggest percentage increase to their base pay, subject to their end-of-year performance rating.
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Data table
This graph shows average base salary increase of associate colleagues by age and associate grade level.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
5.2. Disability
We do not have full disclosure on disability status, with 27.7% of colleagues giving no response and 2.9% choosing ‘prefer not to say’.
Disabled colleagues received an average base salary increase of 3.4%, compared to non-disabled colleagues who received an average salary increase of 3.7%.
Figure 5 shows the average base salary increase by disability status and contractual grade.
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Data table
This chart shows the average base salary increase by disability status and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
Before the performance-related pay matrix was applied, the positioning of disabled and non-disabled colleagues across the pay ranges was similar. After the performance-related pay matrix was applied, colleagues without a disability received slightly higher increases on average than colleagues with a disability.
Figure 6 shows the breakdown of the associate population into the 4 grade levels and by disability status.
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Data table
This chart shows the average base salary increase of associate colleagues by disability status and associate grade level.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
5.3. Ethnicity
The average base salary increase was 3.8% for our mixed/multiple ethnic colleagues and 3.7% for Asian, black, other and white colleagues.
Figure 7 below shows a breakdown of the average base salary increase by ethnicity and contractual grade.
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Data table
This chart shows the average base salary increase by ethnicity and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
A higher proportion of colleagues who are Asian (23.3%), black (24.3%) or of mixed/multiple ethnicities (22.3%) are under 31 years old, compared to white (16.8%) colleagues.
As seen in previous years, younger colleagues tend to be positioned in more junior roles and often lower in their pay range, resulting in greater salary increases. This may explain the higher increases at the professional support grade level.
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Data table
This chart shows the average base salary increase of associate colleagues by ethnicity and associate grade level.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
5.4. Religion or belief
When comparing average salary increases across colleagues’ religion or beliefs, there are minor differences.
Colleagues who are Atheist and Hindu received the highest average salary increase with 3.9%, followed by Muslim colleagues at 3.8%, Christian and other religions 3.6%, Jewish 3.4%, Buddhist and Sikh 3.3%.
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Data table
This chart shows the average base salary increase by religion and contractual grade.
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
A greater proportion of Muslim colleagues are in the lower age brackets compared to colleagues who hold a different religion or belief, with 33.2% aged 30 or below.
5.5. Sex
The overall average salary increase was 3.7% for men and 3.8% for women.
The average salary increase by sex and contractual grade is shown in Figure 10 below.
There is little difference in the average salary increase between men and women at each contractual grade apart from at the professional support level.
Men in professional support received an average increase of 8.7% in comparison to women who received on average a 3.9% increase. This is largely driven by the much higher proportion of male apprentices within this grade and the higher pay increases awarded to the apprentice population. 62.9% of men within this grade are in the apprentice scheme, compared to 7.3% of women.
If the apprentice population is removed from the analysis, then the average increase in professional support was 3.2% for women and 2.9% for men.
In addition, 21.5% of women, compared to 5.7% of men in professional support were positioned in the upper third or above the pay range maximum when aligned to the new 2025 pay range. The average salary increase is lower for these colleagues due to their higher position in the pay range.
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Data table
This chart shows the average base salary increase by sex and contractual grade.
Figure 11 shows the breakdown of the associate population into the 4 grade levels. It excludes degree-level apprentices and graduates.
There is little difference in the average base salary increases awarded. Women received slightly higher average base salary increases than men at each level apart from associate level 8.
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Data table
This chart shows the average base salary increase of associate colleagues by sex and associate grade level.
5.6. Sexual orientation
The salaries of bisexual colleagues increased on average by 4.7%, gay/lesbian colleagues by 3.9% and heterosexual colleagues by 3.7%.
Of colleagues who are bisexual, 48.9% are aged 30 or below. This compares with 21.1% gay/lesbian colleagues and 18.8% of heterosexual colleagues. Of colleagues who are heterosexual/straight, almost 50% are over 41 years old.
Colleagues in the lower age brackets tend to be positioned lower in their respective pay range and therefore benefit from greater salary increases.
5.7. Location
Overall, London-based colleagues received an average salary increase of 3.8%, compared to 3.5% for colleagues based in Edinburgh and Leeds.
Figure 12 confirms that within contractual grades, London-based colleagues have seen higher average salary increases at the professional support, associate and head of department grade levels.
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Data table
*Where there are fewer than 6 people, this will show as 0 on the chart and an asterisk (*) in the data table, to avoid identifying individuals.
A factor driving the difference in the average salary increase is the much higher proportion of professional support and associate colleagues in London.
Figure 13 shows the proportion of colleagues in each contractual grade by location. It highlights that 94.1% of professional support colleagues and 89% of associate colleagues are based in London. Colleagues in more junior roles typically received higher average salary increases.
In addition, a greater proportion of London colleagues (50%) compared to nationally based colleagues (39.7%) were positioned either below or in the lower third of their new pay range before the performance-related pay matrix was applied.
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Data table
This chart shows the proportion of colleagues by location in each contractual grade.
5.8. Additional protected characteristics
Our view is that the salary changes applied in April 2025 do not affect colleagues based on gender reassignment, marriage and civil partnership, or pregnancy and maternity in a positive or negative way that is disproportionate or unfair.
6. Compliance with the public sector equality duty
To comply with the public sector equality duty, we must, in the exercise of our functions, have ‘due regard’ to the need to meet 3 equality objectives under the Equality Act 2010, namely to:
- Eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Equality Act.
- Advance equality of opportunity between people who share a ‘relevant protected characteristic’ and those who do not.
- Foster good relations between people who share a ‘relevant protected characteristic’ and those who do not.
One of the objectives of the pay review changes is to narrow the pay gaps and increase equality of opportunity between colleagues who share a relevant protected characteristic and those who do not.
Overall, our view is that the changes implemented as part of the 2025 pay review do not affect colleagues with protected characteristics in a positive or negative way that is disproportionate or unfair.
7. Annex A: 'At our Best awards' for 1 April 2024 to 31 March 2025
‘At our Best’ awards scheme
We continue to recognise excellent performance in the moment and increased the size of the ‘At our Best’ awards scheme budget in line with our headcount growth.
In the financial year 2024/25, the budget was set at £1.25m.
Colleagues are eligible for single awards of up to £1,000, with a maximum of £2,000 in any performance year. Any colleague can suggest someone for an award to their local management team.
The analysis in Figure 14 below is based on the colleagues included in the EIA data set and shows the percentage who received 1 or more awards from 1 April 2024 to 31 March 2025, against protected characteristics, location and contractual grade.
When looking at awards received by contractual grade, this is based on the grade level colleagues were at on 31 March 2025. For example, if a colleague received an award when they were a manager but were later promoted to head of department during 2024/25, the award will be captured under the head of department contractual grade.
Overall, 80.5% of colleagues received an ‘At our Best’ award. By age bracket, 48.5% of colleagues aged 18 to 20 received an award, compared to over 80% of colleagues in the other age brackets. A factor contributing to this is that the majority of 18 to 20-year-olds are on the apprenticeship programme and joined in October 2024, part way through the year.
In terms of other protected characteristics, although there are some minor differences between the percentage of colleagues who did and did not receive an award, our view is the award scheme does not affect colleagues based on protected characteristics in a positive or negative way that is disproportionate or unfair.
8. Annex B: Outcomes from interim and end-of-year performance reviews 2024/2025
The FCA/PSR operates a robust performance management process, with 97% of colleagues completing a performance review for the performance year 1 April 2024 to 31 March 2025.
The tables below give a breakdown of the performance review outcomes by protected characteristic at the interim and end-of-year and based on employee records as of May 2025.
The totals in the below tables might not equal 100% due to rounding. Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.
8.1. Outcomes from end-of-year performance reviews 2024/25
FCA
PSR
Performance rating changes following a request for a review
No record is kept of the number of requests received from colleagues to review their end-of-year performance rating. However, the number of outcomes changed following a review are captured in Figure 17 below.
All the changes resulted in a single step increase in the value of the colleague’s performance rating.
Figure 17: FCA/PSR performance rating changes following a request for a review 2024/25
| Ratings changed | |
|---|---|
| All | 7 |