Bank bonuses have reached their highest levels since the 2008 financial crisis, prompting calls for a hike in the windfall tax to help struggling households with their energy bills.
Analysis of bank bonus data by the Trades Union Congress (TUC) shows £25 billion was paid out in bonuses in the financial year ending in March 2026 - up 16% annually.
The TUC said bank bonuses have never been higher in cash terms and saw their highest real-terms quarter since 2008.
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Ahead of the chancellor’s Mansion House speech this evening, the TUC claims these figures suggest there is room for a higher bank surcharge tax that could help fund a social tariff that would permanently cut energy bills for the majority of households.
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The trade union says that “while sky-high bills are looming for ordinary working people, bank bonuses are booming”, adding that this is further evidence that banks could easily afford to pay more tax.
What is the bank surcharge tax?
The bank surcharge tax or windfall tax is an additional 3% corporation tax on the profits of banks above £100 million.
It was introduced 2016 as part of efforts to redistribute wealth back into the UK economy and was reduced from an initial 8% in April 2023 by the Conservative government.
Critics claim that the surcharge doesn’t go far enough, especially as banks have also benefited from charging higher interest rates on loans and mortgages in recent years.
Sara Hall, co-executive director at research group Positive Money, said: “Record bonuses to celebrate record profits - the cost of living crisis must be something of a fantasy to City bankers.
“Banks aren’t redirecting the windfall profits they’ve made from higher interest rates towards the households or businesses struggling to pay them, so it falls to the Government to do so in their stead.”
TUC analysis reveals an increase in the bank surcharge could raise between £9 billion and £60 billion over the next four years.
Even just reversing the Tory cuts and setting it at 8% would raise £9 billion over four years, the TUC said.
A 16% surcharge, doubling the surcharge's previous value before the Conservatives cut it, would deliver £24 billion over four years.
Meanwhile, a 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would deliver £60 billion over four years.
It comes after the big four banks made profits of £45.7 billion in 2025.
TUC analysis of the wider banking sector shows profits are 40% higher than in the lead up to the 2008 financial crisis.
The trade union suggests an increase in the bank surcharge tax could deliver a permanent social tariff - and further support when there is a spike in costs - to cut energy bills to all those on low and middle incomes by up to £559 a year.
Paul Nowak, general secretary of the TUC, said: “While sky-high bills are looming for working people, bank bonuses are booming.
“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. They can well afford to pay more tax.
“The case for an increase in the bank surcharge tax has never been greater. It’s a long overdue common-sense solution – and the government should use to money raised to cut people’s energy bills.”
Positive Money's Hall suggests prime ministerial frontrunner Andy Burnham is being handed a rare opportunity to rebalance the scales in the public’s favour.
She said: “He should seize the chance to implement this popular policy that won’t cost the Government a penny, but might just earn it some desperately-needed trust.”
Should banks help fund a social tariff?
A higher bank surcharge could ultimately mean reduced bonuses.
That may please the unions but not everyone is in agreement.
Samuel Mather-Holgate, managing director of Mather and Murray Financial, highlights that bank bonuses are not just City excess but are a performance tool.
He said: “If banks want to attract people who can grow lending, manage risk and deliver returns, pay has to reward results.
"Since the bonus cap era, UK bank profitability and competitiveness have hardly looked world-beating, so doubling down on restrictions would be a strange answer. There is a fair debate about whether banks should contribute more to public finances, but cutting bonuses to fund energy bills risks treating pay policy as a piggy bank.
“A social tariff may be worth considering, but it needs a stable funding model, not a raid on incentives that help banks perform.”
Anita Wright, financial planner at Ribble Wealth Management, added: “Energy bills didn't go up because bankers got paid too much. They went up because years of cheap money and a falling pound made everyone's cash worth less.
“The same forces that fattened those bank profits are the ones now squeezing families.”
If you really want to help people with their bills, said Wright, people should ask why the pound in their pocket buys less every year.
She added: "Blaming bankers is easier. It also fixes nothing. Someone always has to pay. Changing who picks up the tab isn't the same as shrinking it.”
