United Kingdom
UK pension regulation steers defined benefit schemes into gilts, and since the 2022 LDI crisis the Bank of England has added a standing repo backstop for gilt holders. The Pension Schemes Act 2026 created a reserve power to mandate DC pension allocations, while stamp duty on shares and the gilt CGT exemption tilt tax treatment toward government bonds. In September 2026 the Bank set a multi-year plan to unwind QE that routes any gilt sales to the DMO.
- 15 in force
- 4 enacted
- 2 proposed or under discussion
Measures as of
How the index is built
Each segment is what one category of rules, or the market pillar, adds to the index. The full bar is 100.
- Captive demand 8.0
- Central bank financing 8.0
- Capital controls 6.4
- Rate caps 0.0
- Prudential sovereign bias 4.0
- Directed credit 2.0
- Tax incentives 3.5
- Real asset restrictions 3.8
- Transaction taxes 2.5
- Market pillar 6.2
Index = 80% × rules (47.7) + 20% × market (30.8) = 44.4
The method in plain words
- Rules pillar (0–100). Each of the 9 categories can add up to its weight (the weights sum to 100). A category's intensity grows with every in-force measure in it: one measure counts by its severity factor (0.25 for severity 1, 0.5 for 2, 0.8 for 3), and each further measure closes part of the remaining gap, so breadth adds with diminishing returns: two severity-3 measures give 96%.
- Market pillar (0–100). The average of the market readings below: how negative the real policy rate is, and how much of the government's debt is held by its own central bank and banks.
- Index. 80% rules + 20% market when market data exists, otherwise rules alone. Laws passed but not yet applying count only in the outlook; proposals never count.
The 9 categories
Weight = the most points a category can add to the rules pillar. Intensity = how much of that weight the in-force measures fill. Open a category to see the measures counted; “What is this?” shows the instruments behind it, worldwide and in history.
- 1 enacted, 2 proposed not countedWeight 16Intensity 63%Points 8.0 → 10.4 once enacted laws apply
Mandated holdings of government debt by pension funds, insurers or banks. What is this? →
Captive demand: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 5.7 1 of 3 0.25 2.3 - Weight 16Intensity 63%Points 8.0
Central bank purchases of government debt, yield curve control, direct monetary financing. What is this? →
Central bank financing: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 5.7 1 of 3 0.25 2.3 - 1 enacted not countedWeight 16Intensity 50%Points 6.4 → 9.6 once enacted laws apply
Limits on moving money abroad, outbound investment limits, FX controls. What is this? →
Capital controls: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 6.4 - Rate capsWeight 14Intensity 0%Points 0.0
Caps or ceilings on deposit or lending rates, and administered interest rates. No in-force measures here. What is this? →
- Weight 10Intensity 50%Points 4.0
Prudential rules that favor sovereign debt (zero risk weights, liquidity-buffer rules, leverage-ratio exemptions). What is this? →
Prudential sovereign bias: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 4.0 - 1 enacted not countedWeight 10Intensity 25%Points 2.0 → 5.0 once enacted laws apply
State-directed lending, credit guidance, and mandates to invest domestically or in state priorities. What is this? →
Directed credit: measures counted in the index Measure counted Severity Factor Points 1 of 3 0.25 2.0 - 1 enacted not countedWeight 7Intensity 63%Points 3.5 → 4.0 once enacted laws apply
Tax privileges for government bonds, or tax penalties on competing assets. What is this? →
Tax incentives: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 2.5 1 of 3 0.25 1.0 - Weight 6Intensity 79%Points 3.8
Rent controls, property curbs, and limits on owning gold, cash or crypto. What is this? →
Real asset restrictions: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 1.7 1 of 3 0.25 0.7 1 of 3 0.25 0.7 1 of 3 0.25 0.7 - Weight 5Intensity 63%Points 2.5
Financial transaction taxes, stamp duties and similar levies on non-government assets. What is this? →
Transaction taxes: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 1.8 1 of 3 0.25 0.7
Market pillar 30.8 / 100
The average of the readings that have data, worth 20% of the index (6.2 points here).
Real policy rate
19.1 / 1000.7% · Aug 2026
Policy rate minus inflation. A real rate of +2% or more scores 0; −5% or less scores 100; in between it scales in a straight line. Savers lose most when it is deeply negative.
Policy rate 3.75% minus consumer price inflation 3.087% (year on year), 2026-08.
Debt held by the central bank and domestic banks
42.6 / 10025.5% of government debt · 2025-Q4
Share of government debt held by the domestic central bank and domestic banks. 0% scores 0; 60% or more scores 100; in between it scales in a straight line.
Central bank 17.8% + domestic banks 7.73% of general government debt, 2025-Q4.
Indicators
Measured data from international sources, alongside the rules above. Real rates below zero mean savers lose purchasing power.
Policy rate, inflation and real rate
Who holds government debt
The liquidation effect follows Reinhart and Sbrancia: with a negative real rate, about −(real rate × debt) of GDP moves from savers to the state each year. It uses the policy rate, so treat it as a rough guide. Sources: BIS, BIS central bank policy rates; BIS consumer prices; IMF, IMF DataMapper: World Economic Outlook (October 2026); Fiscal Monitor (October 2026); Menzie D. Chinn and Hiro Ito, The Chinn-Ito Index (KAOPEN): a de jure measure of financial openness; IMF, Sovereign Debt Investor Base for Advanced Economies / for Emerging Markets and Developing Economies (Arslanalp and Tsuda).
Measures
Every measure tracked here, with its legal basis and sources. Only in-force measures count in the index.
In force (15)
Renters' Rights Act 2025 (England)
Adds 0.7 points to the index
From 1 May 2026, private landlords in England can raise rent only once a year through a statutory notice with two months' warning, rent review clauses are void, and tenants can challenge increases at the First-tier Tribunal. It does not set a numerical cap.
Why it counts: Limits on how often and how rents rise slow landlords' ability to keep pace with inflation, trimming real returns on rental property.
Legal basis Renters' Rights Act 2025 (c. 26), Section 6 (amending Housing Act 1988 s.13; new s.13(4A)) and 1 more
Renters' Rights Act 2025 (c. 26), Section 6 (amending Housing Act 1988 s.13; new s.13(4A))Primary source
“The rent for a period of an assured tenancy to which this section applies may not be greater than the rent for the previous period except by virtue of”
The Renters' Rights Act 2025 (Commencement No. 2 and Transitional and Saving Provisions) Regulations 2026 (SI 2026/421), Regulation 2Primary source
“The following provisions of the 2025 Act, in so far as not already in force, come into force on 1st May 2026 for the purposes of assured tenancies that are not social housing assured tenancies”
Scotland: rent control areas (Housing (Scotland) Act 2025)
Adds 0.7 points to the index
The Housing (Scotland) Act 2025 lets ministers designate rent control areas where annual private rent rises are capped at CPI plus 1%, with a 6% maximum; these powers came into force on 1 April 2026. Local authority reports on rents are due by 31 May 2027, and no area has yet been designated; mid-market and build-to-rent homes are exempt under regulations in force since 1 April 2026.
Why it counts: A cap tied to inflation plus a fixed ceiling limits real rent growth in high-inflation years.
Legal basis Housing (Scotland) Act 2025 (asp 13), Section 9(1) (power to designate rent control area) and 1 more
Housing (Scotland) Act 2025 (asp 13), Section 9(1) (power to designate rent control area)Primary source
“the Scottish Ministers may by regulations designate all or part of the area of the local authority as a rent control area.”
Housing (Scotland) Act 2025 (asp 13), Section 23 (inserting Part 4A into the Private Housing (Tenancies) (Scotland) Act 2016: new ss.43D and 43L(2))Primary source
“But the landlord under a current tenancy may not increase the rent payable under the tenancy by more than the permitted rate.”
Cryptoasset Reporting Framework: exchanges report UK users' holdings and trades to HMRC
Adds 6.4 points to the index
From 1 January 2026 UK reporting cryptoasset service providers (exchanges, brokers, dealers) must collect tax-residence and identity data on all users and report users resident in the UK or in CARF partner countries, with a summary of their transactions, to HMRC each year. The first report, covering calendar 2026, is due between 1 January and 31 May 2027; penalties run up to GBP 300 per user, and providers may refuse service to customers who do not supply the information.
Why it counts: Ends practical anonymity for crypto held through intermediaries, including purely domestic UK users (the UK extended CARF to its own residents), so holdings moved out of the banking system become visible to the tax authority much like bank interest.
Legal basis The Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 (SI 2025/744), Regulation 1 (citation and commencement) and 2 more
The Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 (SI 2025/744), Regulation 1 (citation and commencement)Primary source
“These Regulations may be cited as the Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 and come into force on 1st January 2026.”
HMRC Cryptoassets Manual, CRYPTO49000 - The Cryptoasset Reporting FrameworkPrimary source
“The reporting obligation applies in relation to customers resident in the UK and customers resident in one of the countries in the list provided by HMRC.”
HMRC guidance: Reporting cryptoasset user and transaction data, When to report / PenaltiesPrimary source
“You need to submit your first report between 1 January 2027 and 31 May 2027, giving details for 1 January 2026 to 31 December 2026.”
SDRT holiday for newly listed companies
Adds 0.7 points to the index
From 27 November 2025, trades in shares of companies newly listed on a UK regulated market are exempt from the 0.5% SDRT for three years after listing, except where the listing stems from a merger of listed companies or a holding-company reorganisation, or control of the company changes after listing.
Why it counts: It narrows the share-trading tax for new listings, slightly reducing the tax gap between equities and gilts.
Legal basis Finance Act 2026 (c. 11), inserting section 89C (UK listing relief) into the Finance Act 1986, Section 85(1) (new FA 1986 s.89C(1)) and s.85(2) and 1 more
Finance Act 2026 (c. 11), inserting section 89C (UK listing relief) into the Finance Act 1986, Section 85(1) (new FA 1986 s.89C(1)) and s.85(2)Primary source
“The amendment made by subsection (1) has effect in relation to an agreement to transfer chargeable securities in a company that is first listed on or after 27 November 2025”
HMRC policy paper: Stamp Duty Reserve Tax: UK listing reliefPrimary source
“The measure will have effect for agreements to transfer made on or after 27 November 2025. It will apply where the shares of the relevant company are newly listed on or after that date.”
Mansion House Accord (voluntary UK allocation pledge)
Adds 2.0 points to the index
Seventeen workplace pension providers pledged in May 2025 to put at least 10% of DC default funds into private markets by 2030, with at least 5% in UK assets, subject to supply. It builds on the 2023 Mansion House Compact.
Why it counts: Government-encouraged pledges steer pension savings toward domestic priorities, backed by the threat of the statutory reserve power.
No legal instrument: a voluntary or informal arrangement.
Contingent NBFI Repo Facility for gilt holders
Adds 2.3 points to the index
Since January 2025 the Bank of England can lend cash against gilts to eligible insurers, DB pension schemes and LDI funds during severe gilt market dysfunction. Participants generally need around GBP 2 billion of gilts.
Why it counts: A standing central bank backstop makes gilts easier to finance in a crisis, which supports institutional demand for them.
Legal basis Bank of England Market Operations Guide: Contingent Non-Bank Financial Institution Repo Facility (CNRF) and 1 more
Bank of England Market Operations Guide: Contingent Non-Bank Financial Institution Repo Facility (CNRF)Primary source
“The CNRF will lend cash to participating insurance companies, pension funds and liability-driven investment funds against UK sovereign debt (gilts) for a short lending term.”
Bank of England news release: Bank of England to open new contingent non-bank lending facility for applicationsPrimary source
“To maximise effectiveness, firms need to hold more than £2 billion gilts alongside meeting other eligibility criteria.”
DB pension funding code: low-dependency investment by maturity
Adds 5.7 points to the index
The DB funding regime (the 2024 Funding and Investment Strategy Regulations, with the Pensions Regulator's DB funding code), applying to valuations from 22 September 2024, requires defined benefit schemes to plan for a low-dependency investment allocation, highly resilient to market moves, by the time they reach significant maturity.
Why it counts: Mature DB schemes are pushed toward bond-heavy, liability-matching portfolios in which gilts and index-linked gilts dominate.
Legal basis The Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 (SI 2024/462), made under Pensions Act 2004 s.221A, Schedule, paragraph 1(c); regulation 5 and 1 more
The Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 (SI 2024/462), made under Pensions Act 2004 s.221A, Schedule, paragraph 1(c); regulation 5Primary source
“the objective that on and after the relevant date the assets to which the minimum funding level relates, as provided for in paragraph 3, are invested in accordance with a low dependency investment allocation.”
The Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024 (SI 2024/462), Regulation 5 (Low dependency investment allocation)Primary source
“the value of the assets relative to the value of the scheme’s liabilities is highly resilient to short-term adverse changes in market conditions”
Cryptoasset financial promotions regime: 24-hour cooling-off, appropriateness tests, incentive ban
Adds 0.7 points to the index
Since 8 October 2023 promoting qualifying cryptoassets to UK consumers, including by overseas firms, is a regulated financial promotion: it must be made or approved by an FCA-authorised firm or an MLR-registered crypto business, or fall within an exemption, otherwise it is a criminal offence. Crypto is classed as a restricted mass market investment, so firms must impose a 24-hour cooling-off period for first-time investors before a direct offer, run appropriateness assessments, show prescribed risk warnings and may not offer 'refer a friend' or similar investment incentives.
Why it counts: Adds mandatory frictions and warnings to every new retail purchase and lets the FCA block foreign platforms from advertising to UK savers, discouraging switching from deposits and gilts into crypto.
Legal basis FCA Handbook, Conduct of Business Sourcebook (PS23/6), COBS 4.12A.18R (cooling off period) and 2 more
FCA Handbook, Conduct of Business Sourcebook (PS23/6), COBS 4.12A.18R (cooling off period)Primary source
“allows a period of at least 24 hours (the ‘cooling off period’) to elapse before communicating the direct offer financial promotion”
FCA guidance page on the cryptoasset financial promotions regime (FSMA 2000 s.21; Financial Promotion (Amendment) Order 2023), Scope and start datePrimary source
“All cryptoasset firms marketing to UK consumers, including firms based overseas, will need to comply with the UK financial promotions regime from 8 October 2023.”
FCA PS23/6 (press release), Ban on refer-a-friend bonusesPrimary source
“As part of a package of measures designed to ensure those who buy crypto understand the risk, ‘refer a friend’ bonuses will also be banned.”
LDI resilience buffers after the 2022 gilt crisis
Adds 2.3 points to the index
After the September 2022 LDI crisis, the Pensions Regulator issued guidance (April 2023) that leveraged LDI arrangements used by pension schemes should operate a market stress buffer of at least 250 basis points plus an operational buffer, following a Bank of England FPC recommendation.
Why it counts: Schemes must keep more collateral, usually gilts and cash, behind gilt-based hedges, which keeps them as committed gilt holders with less leverage.
Legal basis The Pensions Regulator, 'Using leveraged liability-driven investment' (detailed guidance), Market stress buffer
The Pensions Regulator, 'Using leveraged liability-driven investment' (detailed guidance), Market stress bufferPrimary source
“The LDI arrangement should also operate a market stress buffer, so the fund can operate as business as usual even where there are sharp market movements. This buffer should be, at a minimum, 250 bps.”
FCA ban on selling crypto derivatives to retail clients (ETN part lifted October 2025)
Adds 1.7 points to the index
Since 6 January 2021 FCA rules (COBS 22.6) bar firms acting in or from the UK from selling, distributing or marketing derivatives (CFDs, options, futures) and exchange traded notes referencing unregulated cryptoassets such as bitcoin to retail clients. From 8 October 2025 the ETN part was lifted for crypto ETNs admitted to a UK recognised investment exchange, which are now treated as restricted mass market investments; the derivatives ban and the ban on non-UK-RIE crypto ETNs remain.
Why it counts: Retail savers cannot gain leveraged or hedged crypto exposure through UK firms, and regulated exchange-traded exposure is limited to UK-listed ETNs subject to marketing frictions and no FSCS cover, narrowing the routes by which savings move into crypto.
Legal basis FCA Handbook, Conduct of Business Sourcebook, COBS 22.6.5R (version effective 08/10/2025) and 2 more
FCA Handbook, Conduct of Business Sourcebook, COBS 22.6.5R (version effective 08/10/2025)Primary source
“sell a cryptoasset derivative or a non-UK RIE cryptoasset exchange traded note to a retail client”
FCA PS20/10 (press release announcing final rules), Commencement of the banPrimary source
“The ban will come into effect on 6 January 2021.”
FCA Handbook Notice 132 (press release), Retail access to UK RIE crypto ETNsPrimary source
“The FCA’s ban on retail access to cryptoasset derivatives will remain in place.”
Capital gains tax on cryptoasset disposals (no gilt-style exemption)
Adds 2.5 points to the index
HMRC treats cryptoasset tokens as chargeable assets: selling them, swapping one token for another, spending them or giving them away (except to a spouse, civil partner or charity) is a disposal for capital gains tax. Gains above the GBP 3,000 annual exempt amount are taxed at 18% where they fall within the basic-rate income tax band and 24% above it (the rates gov.uk shows for gains from 6 April 2026), with share-style pooling and same-day / 30-day matching rules.
Why it counts: Every crypto-to-crypto swap and every purchase paid in crypto is a taxable event, and only a GBP 3,000 allowance shelters gains, whereas gains on gilts are fully exempt (see uk-gilt-cgt-exemption); this widens the after-tax gap in favour of government debt.
Legal basis HMRC Cryptoassets Manual (applying the Taxation of Chargeable Gains Act 1992), CRYPTO22100 - Capital Gains Tax: what is a disposal and 2 more
HMRC Cryptoassets Manual (applying the Taxation of Chargeable Gains Act 1992), CRYPTO22100 - Capital Gains Tax: what is a disposalPrimary source
“Individuals need to calculate their gain or loss when they dispose of their tokens to find out whether they need to pay Capital Gains Tax.”
HMRC guidance: Check if you need to pay tax when you sell cryptoassets, Working out your gain (pooling and 30-day rule)Primary source
“The way you work out your gain is different if you sell tokens within 30 days of buying them.”
GOV.UK guide: Capital Gains Tax rates, Annual exempt amount 2026-27 (worked example)Primary source
“For the 2026 to 2027 tax year the allowance is £3,000, which leaves £9,600 to pay tax on.”
Bank prudential rules favoring gilts (LCR Level 1, large-exposure exemption)
Adds 4.0 points to the index
Under the PRA's onshored rules, UK government debt counts as a Level 1 liquid asset with no haircut, carries a zero risk weight, and exposures to it are exempt from large-exposure limits.
Why it counts: Banks can meet liquidity and capital rules by holding gilts at little regulatory cost, which builds structural demand for government debt.
Legal basis PRA Rulebook, Liquidity Coverage Ratio (CRR) Part, Chapter 2, Article 10(1)(c)(i) and Article 10(2) and 2 more
PRA Rulebook, Liquidity Coverage Ratio (CRR) Part, Chapter 2, Article 10(1)(c)(i) and Article 10(2)Primary source
“assets representing claims on or guaranteed by the following central or regional governments, local authorities or public sector entities:”
Regulation (EU) No 575/2013 (UK CRR, as retained and amended), Article 114(4)Primary source
“the central government of the United Kingdom and the Bank denominated and funded in sterling”
PRA Rulebook, Large Exposures (CRR) Part, Chapter 4, Article 400(1)(a)Primary source
“asset items constituting claims on central governments, central banks or public sector entities which, unsecured, would be assigned a 0% risk weight under Part Three, Title II, Chapter 2;”
Bank of England APF gilt holdings and QT plan
Adds 5.7 points to the index
The Bank of England's Asset Purchase Facility still holds about GBP 488 billion of gilts bought under QE. On 17 September 2026 the MPC set a multi-year plan to unwind the monetary-policy stock by 2034, at about GBP 46 billion a year including GBP 20 billion of annual sales, which the Bank intends to make to the Government (the DMO) rather than the market, subject to agreement with HM Treasury; APF auctions are paused meanwhile. Separately, the Bank Executive will hold around GBP 120 billion of the longest-dated gilts to maturity to back banknotes indirectly.
Why it counts: Large central bank holdings keep gilt yields lower than otherwise; a slow, pre-announced unwind that leaves long-dated gilts untouched limits the pressure on long yields.
Legal basis Letter from the Governor to the Chancellor on the Asset Purchase Facility (APF), Points 1-3 and 1 more
Letter from the Governor to the Chancellor on the Asset Purchase Facility (APF), Points 1-3Primary source
“the remaining stock of bonds held for monetary policy purposes is unwound at an annual average pace of £46bn by the end of 2034, through annual sales of £20bn alongside maturing gilts.”
Letter from the Governor to the Chancellor on the Asset Purchase Facility (APF), Point 3Primary source
“the Bank Executive announced that £120bn of the longest-dated gilts in the APF will remain in the APF.”
Capital gains on gilts exempt from tax
Adds 1.0 points to the index
Under section 115 of the Taxation of Chargeable Gains Act 1992, disposals of gilt-edged securities have been exempt from capital gains tax since 2 July 1986.
Why it counts: Low-coupon gilts bought below par give tax-free gains, which makes them more attractive to taxable savers than shares or deposits.
Legal basis Taxation of Chargeable Gains Act 1992 (c. 12), Section 115(1) and 1 more
Taxation of Chargeable Gains Act 1992 (c. 12), Section 115(1)Primary source
“any option or contract to acquire or dispose of gilt-edged securities or qualifying corporate bonds, shall not be a chargeable gain.”
HMRC Capital Gains Manual CG54900: Gilt-edged securitiesPrimary source
“Since 2 July 1986 all disposals of gilt-edged securities have been exempt from Capital Gains Tax, TCGA92/S115”
Stamp duty / SDRT of 0.5% on UK share purchases
Adds 1.8 points to the index
Buyers of UK shares pay 0.5% stamp duty reserve tax on electronic trades, or 0.5% stamp duty on paper transfers over GBP 1,000, and 1.5% on transfers into some depositary receipt or clearance systems. Gilts, and shares traded on recognised growth markets, are not subject to the charge.
Why it counts: Taxing share purchases but not gilts lowers the net return on UK equities relative to government bonds.
Legal basis Finance Act 1986 (c. 41), Part IV (Stamp Duty Reserve Tax), Section 87(1) (principal charge; rate in s.87(6)) and 2 more
Finance Act 1986 (c. 41), Part IV (Stamp Duty Reserve Tax), Section 87(1) (principal charge; rate in s.87(6))Primary source
“This section applies where a person (A) agrees with another person (B) to transfer chargeable securities (whether or not to B) for consideration in money or money's worth.”
GOV.UK guidance: Tax when you buy sharesPrimary source
“You’ll have to pay tax at 1.5% if you transfer shares into some ‘depositary receipt schemes’ or ‘clearance services’”
HMRC Stamp Taxes on Shares Manual STSM031160: Scope of SDRT: reliefs and exemptionsPrimary source
“for example exempt loan capital under section 79(4) FA1986, and government stocks (gilts)”
Enacted, not yet in force (4)
Cash ISA allowance cut to GBP 12,000 for under-65s
Counts in the outlook only: adds 0.9 points once it applies
Regulations made on 10 September 2026, following the November 2025 Budget, provide that from 6 April 2027 savers under 65 can put at most GBP 12,000 of the GBP 20,000 ISA allowance into cash. Transfers from stocks-and-shares ISAs into cash ISAs are barred for them, and interest on cash held in stocks-and-shares ISAs faces a flat 22% charge, alongside new money-market-fund rules.
Why it counts: Removing tax shelter from part of cash savings steers savers toward stocks and shares, with the government aiming to boost investment in UK markets.
Legal basis The Individual Savings Account (Amendment) (No. 2) Regulations 2026 (SI 2026/1018), amending the Individual Savings Account Regulations 1998 (SI 1998/1870), Regulation 6 (new reg. 4(1ZA) of the 1998 Regulations) and 1 more
The Individual Savings Account (Amendment) (No. 2) Regulations 2026 (SI 2026/1018), amending the Individual Savings Account Regulations 1998 (SI 1998/1870), Regulation 6 (new reg. 4(1ZA) of the 1998 Regulations)Primary source
“In any year in which a qualifying individual is 64 or under at the end of that year, the subscription limit for the aggregate of the individual's subscriptions to cash accounts is £12,000.”
HMRC tax information and impact note: Cash Individual Savings Account (ISA) limit reductionPrimary source
“These include restrictions on transfers from stocks and shares ISAs and Innovative Finance ISAs”
FCA stablecoin rules: backing assets limited to bank deposits and government debt
Counts in the outlook only: adds 4.3 points once it applies
Under the FCA's final stablecoin rules (Cryptoassets (Stablecoins) Instrument 2026, made on 25 June 2026 and published in PS26/10 on 30 June 2026, new CASS 16), a UK issuer of a qualifying stablecoin may hold only 'core backing assets' - on-demand deposits and short-term government debt (UK or Zone A sovereign, maturity of 365 days or fewer) - unless it notifies the FCA and meets extra conditions to hold 'expanded' assets such as longer-dated government debt, public-debt CNAV money market funds and repos. Even then a minimum share (at least 5% of the pool, or the highest daily redemption rate of the past 180 days) must stay in core assets, on top of a 5% on-demand deposit requirement. The rules apply from 25 October 2027.
Why it counts: Every pound placed in a UK-issued stablecoin must be parked in bank deposits or sovereign debt, so stablecoin growth becomes a source of captive demand for gilts (and Zone A government bills) rather than an escape from them.
Legal basis FCA PS26/10, Cryptoassets (Stablecoins) Instrument 2026, CASS 16.2.15R (core backing assets only) and 1 more
FCA PS26/10, Cryptoassets (Stablecoins) Instrument 2026, CASS 16.2.15R (core backing assets only)Primary source
“Subject to CASS 16.2.16R, a firm may only hold core backing assets in a backing asset pool.”
FCA PS26/10, Glossary (Cryptoassets) Instrument 2026, Glossary definition: short-term government debt instrumentPrimary source
“a debt security representing a claim on the UK government or the central government of a Zone A country with a residual maturity of 365 days or fewer.”
Pension Schemes Act 2026: reserve power to mandate asset allocation
Counts in the outlook only: adds 3.5 points once it applies
The Pension Schemes Act 2026 (Royal Assent 29 April 2026) gives the government a reserve power to require DC master trust and group personal pension default funds to hold minimum shares, capped at 10% (with up to 5% in UK assets), in private equity, venture capital, private credit, land, infrastructure and unlisted equity. The power is not yet in force: it starts on a date set by commencement regulations, no regulations under it may be made before 1 January 2028, it lapses if not brought into force by the end of 2032, and is repealed at the end of 2035.
Why it counts: It lets the state direct workers' pension savings into chosen asset classes and UK investment rather than leaving allocation to trustees.
Legal basis Pension Schemes Act 2026 (c. 22), Section 40 (inserting section 28C into the Pensions Act 2008), new s.28C(18) and 1 more
Pension Schemes Act 2026 (c. 22), Section 40 (inserting section 28C into the Pensions Act 2008), new s.28C(18)Primary source
“The Secretary of State may not make regulations under subsection (1) before 1 January 2028.”
Pension Schemes Act 2026 (c. 22), Section 133(6)Primary source
“If section 40 has not been brought into force before the end of 2032 in respect of the insertion of”
FSMA cryptoasset regime: FCA authorisation required, including for overseas platforms serving UK consumers
Counts in the outlook only: adds 4.8 points once it applies
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, made on 4 February 2026, turn operating a crypto trading platform, dealing, arranging, custody, staking and issuing sterling stablecoins from the UK into FCA-authorised activities from 25 October 2027. An overseas firm that sells or buys crypto directly with a UK retail consumer is treated as carrying on the activity in the UK, so it needs UK authorisation unless an FCA-authorised UK platform or intermediary stands between it and the consumer. The FCA's final rules (policy statements PS26/9 to PS26/13, June 2026) apply from the same date.
Why it counts: Unauthorised foreign exchanges lose lawful direct access to UK savers and must route through licensed UK intermediaries, which bring UK conduct, appropriateness and reporting rules with them; this narrows the offshore channel for moving savings into crypto.
Legal basis The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102), Regulation 1(2) (commencement) and 1 more
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102), Regulation 1(2) (commencement)Primary source
“Subject to paragraph (3) these Regulations come into force on 25th October 2027 (the “full commencement day”).”
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102), Regulation 41(6), inserting FSMA 2000 s.418(6C) (overseas firms dealing with UK consumers)Primary source
“A is involved in the sale or subscription of a qualifying cryptoasset to, or by, a consumer”
Proposed (1)
Bank of England systemic stablecoin regime: 70% gilts / 30% unremunerated BoE deposits, GBP 40bn issuance cap, no interest
Not counted in the index
The Bank of England's draft Code of Practice for sterling systemic stablecoins (policy statement of 22 June 2026, consultation closed 22 September 2026) requires backing of 70% short-term UK government debt (maturity up to 6 months) and 30% unremunerated Bank of England deposits, bars issuers from paying interest to coinholders, and caps each systemic stablecoin at GBP 40 billion of issuance as a temporary guardrail. It replaces the per-coin holding limits of GBP 20,000 for individuals and GBP 10 million for businesses proposed in November 2025; the Bank intends to finalise the Code by end-2026 so regulated stablecoins can operate from 2027.
Why it counts: Systemic stablecoins must recycle 70% of their reserves into short-dated gilts and lend the rest to the central bank interest-free, cannot pass any yield to holders, and are capped in aggregate size to protect bank deposit funding - so they cannot become a yield-bearing alternative to deposits and gilts.
Legal basis Bank of England policy statement: Sterling-denominated systemic stablecoins (under the Banking Act 2009 systemic payment systems regime), Backing assets - updated policy approach and 2 more
Bank of England policy statement: Sterling-denominated systemic stablecoins (under the Banking Act 2009 systemic payment systems regime), Backing assets - updated policy approachPrimary source
“Revision to a 70/30 backing asset composition: 70% short-term UK government debt and 30% unremunerated BoE deposits, consistent with historical liquidity risk events.”
Bank of England policy statement: Sterling-denominated systemic stablecoins, 2.2.4 Remuneration and rewards for coinholdersPrimary source
“Maintain our policy position that systemic stablecoins should not pay interest to coinholders.”
Draft Bank of England Systemic Stablecoin Issuer Code of Practice, Part 7 (Temporary Issuance Guardrail), para 1.1Primary source
“A systemic issuer must not issue systemic stablecoins in a systemic stablecoin product where the relevant systemic stablecoin product total exceeds £40 billion.”
Under discussion (1)
Digital pound design: GBP 10,000-20,000 individual holding limit and no interest
Not counted in the index
The Bank of England and HM Treasury's digital pound proposals (consultation of 7 February 2023, response of 25 January 2024) envisage a retail CBDC that pays no interest and whose individual holdings would be capped, initially in the range of GBP 10,000 to GBP 20,000, with higher limits for corporates. The project is still in its design phase; the Bank says no decision to issue has been made and a decision on next steps is due in 2026, with any launch requiring primary legislation.
Why it counts: A capped, zero-interest state digital currency cannot serve as a store of value competing with bank deposits, so households keep savings in the bank system that funds government debt; the Bank's own modelling ties the cap to limiting deposit outflows.
Legal basis Bank of England and HM Treasury: Response to the Consultation Paper - The digital pound, Holding limits and 2 more
Bank of England and HM Treasury: Response to the Consultation Paper - The digital pound, Holding limitsPrimary source
“For individuals, it was judged that a limit of between £10,000 and £20,000 would likely strike an appropriate balance.”
Bank of England and HM Treasury: Response to the Consultation Paper - The digital pound, RemunerationPrimary source
“The Consultation Paper explained that a digital pound would not be remunerated.”
Bank of England: The digital pound (project page), Next stepsPrimary source
“We haven’t made a decision on whether we will introduce a digital pound.”
Repealed (1)
Bank of England emergency long-gilt purchases (2022)
Not counted in the index
During the LDI crisis the Bank bought long-dated gilts from 28 September to 14 October 2022, offering up to GBP 5 billion a day (raised to GBP 10 billion in the final week, when index-linked gilts were added). It bought GBP 19.3 billion in total, which was sold back by 12 January 2023.
Why it counts: It showed the central bank will step in to cap gilt yields when pension funds are forced sellers.
Legal basis Bank of England press release: Bank of England announces gilt market operation and 1 more
Bank of England press release: Bank of England announces gilt market operationPrimary source
“To achieve this, the Bank will carry out temporary purchases of long-dated UK government bonds from 28 September.”
Bank of England Quarterly Bulletin 2023: Financial stability buy/sell tools: a gilt market case studyPrimary source
“Bank increases maximum daily operation size from £5 billion to £10 billion for the final week of operations.”
Before today
12 examples from United Kingdom in the toolkit, past and present, grouped by what the tool does. Each links to the instrument, its other examples and the cited law.
SteerSteer savings to the state
Captive demand
Voluntary war-bond drives and patriotic savings campaigns (moral suasion)Treasury minute of 8 February 1916 establishing the war savings committees; war savings certificates (later national savings certificates)
1916 → 1978HistoricalCaptive demand
Mandatory investment of postal and small-savings deposits in government securitiesNational Savings Bank Act 1971, ss. 17-18 (ordinary deposits paid to the National Debt Commissioners and invested in Parliamentary securities)
1971HistoricalCaptive demand
Statutory liquidity ratios met with government securitiesBank of England, 'Competition and Credit Control' consultative document of 14 May 1971 (minimum reserve assets ratio replacing the clearing banks' cash and liquidity ratios)
1971HistoricalTax incentives
Capital-gains exemptions for government securitiesTaxation of Chargeable Gains Act 1992, section 115(1)(a)
1986 → nowIn forceTax incentives
Tax-exempt national savings accounts and certificatesIncome Tax (Trading and Other Income) Act 2005, sections 692 and 693
2005 → nowIn force
HoldHold the price of money down
Central bank financing
Treasury overdrafts and ways and means advancesWays and Means facility; HM Treasury–Bank of England temporary-extension announcement of 9 April 2020
2008 → 2020HistoricalCentral bank financing
Reserve-financed government bond purchases (QE)Monetary Policy Committee decision of 4-5 March 2009; Asset Purchase Facility
2009Historical
BlockBlock the exits
Capital controls
Comprehensive exchange controls on payments and capital transfers abroadExchange Control Act 1947 (10 & 11 Geo. 6 c. 14), Part II, s. 5 (payments in the United Kingdom)
1947 → 1979HistoricalReal asset restrictions
Gold ownership limits and licensing of dealingExchange Control (Gold Coins Exemption) Order 1966, SI 1966/438
1966HistoricalReal asset restrictions
Punitive purchase taxes on additional homesFinance Act 2003, schedule 4ZA, higher rates for additional dwellings, as amended
2016 → nowIn forceReal asset restrictions
Caps on rent increasesCost of Living (Tenant Protection) (Scotland) Act 2022 and 2023 rent-cap modification regulations
2022 → 2024HistoricalReal asset restrictions
Rent freezes and fixed base-date rentsCost of Living (Tenant Protection) (Scotland) Act 2022, schedule 1
2022 → 2023Historical
Further reading
- ‘Muddling through or tunnelling through?’ UK monetary and fiscal exceptionalism and the Great Inflation
Bordo, Bush, Thomas · Bank of England, 2025
Reassesses British inflation through the interaction of fiscal policy, debt management and monetary institutions. Its historical account shows how efforts to fund government cheaply and limits on gilt sales pushed financing into the banking system, while later fiscal regime changes helped contain inflation.
- Monetisation: Do not panic
Pisani-Ferry, Blanchard · CEPR, 2020
Argues, from the April 2020 perspective, that pandemic bond purchases did not themselves establish fiscal dominance or inevitable inflation. Whether central banks later raise rates and remunerate reserves matters more than the initial scale of purchases.
- Financial Repression: Evidence and Theory
Chari, Dovis, Kehoe · Federal Reserve Bank of Minneapolis, 2016
Explains how compulsory bank holdings can strengthen a government’s commitment to repay by making default more costly. The model supports repression only under urgent financing needs and weak repayment credibility, because the benefit comes at the expense of productive private investment.
- The Liquidation of Government Debt
Reinhart, Sbrancia · IMF, 2015
Reconstructs government debt portfolios to measure the transfer from savers to governments when controlled interest rates combine with inflation. It finds substantial postwar debt liquidation and explains why high debt after the global financial crisis could revive these policies.
- Tracking Global Demand for Advanced Economy Sovereign Debt
Arslanalp, Tsuda · IMF, 2012
Builds comparable sovereign-debt holdings by investor group and introduces indicators of exposure to investor withdrawals. It documents increased bank exposure to home-country government debt after 2008, providing data for studying captive demand without assuming every domestic holding is coerced.
- Financial repression: Then and now
Reinhart, Kirkegaard · CEPR, 2012
Documents the post-2008 return of negative real rates and policies that encourage domestic institutions to absorb public debt. The authors interpret preferential regulatory treatment, pension restrictions and deposit-rate limits as possible modern forms of repression.