It is written in business as usual, “regardless of how unlikely or distant a prospect solvent exit may seem” (SS2/24 paragraph 2.1). A second document, the solvent exit execution plan, follows only when an exit becomes a reasonable prospect or the PRA asks for one (paragraph 3.3). Solvent here means meeting liabilities as they fall due, and the exit ends when deposit-taking is removed from the firm’s Part 4A permission or the permission is cancelled (paragraph 1.3 and footnote 2).
Which banks and building societies need one?
Every UK bank or building society except those that are, or belong to a group that is, a G-SII, a non-UK G-SII or an O-SII, and those subject to the Operational Continuity Part (Recovery Plans Part rule 7.1). That takes in SDDTs, new and growing banks and every other UK bank or building society outside the systemic tier; the PRA said the policy is not relevant to credit unions or branches of third-country groups (PS5/24 paragraph 1.3).
In a group, the obligation sits with each firm that holds the Part 4A permission (SS2/24 footnote 1). Building societies have an extra step: transferring or repaying all deposits means the society stops meeting the principal purpose test, so the analysis should cover what it would take to dissolve the society under the Building Societies Act 1986 (footnote 4). Insurers have their own version, introduced by PS20/24 and SS11/24 and in force since 30 June 2026.
What must the analysis contain?
Seven things at a minimum: solvent exit actions, indicators, barriers and risks, resources and costs, communication, governance and decision-making, and assurance (SS2/24 paragraph 2.2). The detail should be proportionate to the firm, and the analysis can be a discrete section of the recovery plan or a separate document (paragraph 2.3).
| Content | What SS2/24 expects | Paragraphs |
|---|---|---|
| Solvent exit actions | The actions needed to cease PRA-regulated activities while solvent, including the transfer or repayment of all deposits, with the timeline and what it depends on | 2.5, 2.6 |
| Indicators | Forward-looking financial and non-financial indicators that give enough warning to write an execution plan and carry out the exit while resources remain; monitored for level and trend | 2.7 to 2.9 |
| Barriers and risks | Market-wide and firm-specific obstacles, such as loss of key staff, long property leases, untraceable customers and deposit aggregators; reasonable steps taken now to reduce them; dependencies and likely reactions | 2.10 to 2.13, Box B |
| Resources and costs | Capital, funding and liquidity, including the minimum sale value of assets; the costs of the exit itself; the absolute minimum below which an exit could not succeed; staff, systems, premises and data | 2.14 to 2.17 |
| Communication | Who is affected, how and when they would be told, and how to manage reactions such as a depositor run | 2.18, 2.19 |
| Governance and decision-making | A named accountable executive; the ability to refresh data and project capital, funding and liquidity in reasonable time; timely decisions with the approvals they need | 2.20 to 2.24 |
| Assurance | Internal or external assurance; review on material change and at least every three years; approval under the firm’s governance | 2.25 |
Source: PRA SS2/24 Solvent exit planning for non-systemic banks and building societies, March 2024.
The PRA chose not to publish a template. It said a firm should base its analysis on its own circumstances, and that leaving the format open “reduces the risk of the solvent exit policy being treated as a form-filling compliance exercise” (PS5/24 paragraph 2.18). The line that carries most weight is in paragraph 2.15: the firm should identify “the absolute minimum level of financial resources needed, below which there would be no reasonable prospect of successfully executing a solvent exit”. The indicators, the timeline and the board’s decision point all have to be worked back from that number.
The cost of the exit is more than the losses on asset sales. SS2/24 lists fees for specialist services, redundancy and retention payments, contract termination penalties and pension fund deficits (paragraph 2.15), and warns that the assumptions behind accounting valuations in normal business “may no longer apply” during an exit, especially once it has been announced (footnote 47). Data is a resource in its own right: the single customer view file that would be needed to repay depositors or transfer their deposits is named as an example (footnote 30).
How often must it be updated?
Whenever a material change has taken place that may affect the firm’s preparations for a solvent exit, and at least once every three years (Recovery Plans Part rule 7.3; SS2/24 paragraph 2.25). The firm does not file it routinely: it must be able to give the PRA the current version on request (rule 7.4), and the PRA said its supervisors would communicate with firms “as appropriate” about any request (PS5/24 paragraph 1.10).
For an SDDT the cycles now differ. Its ICAAP and ILAAP are updated at least every two years, and since 1 April 2026 so is its recovery plan (rule 4.2). When the PRA consulted on that change, one respondent asked for three years so the recovery plan and the solvent exit analysis would line up; the PRA kept two, preferring the recovery plan to stay in step with the ICAAP and ILAAP (PS10/26 paragraphs 2.8 and 2.9). A three-year analysis therefore has to be read against two-year documents that may have moved since it was written, and a refreshed recovery plan or ICAAP is the obvious point to check whether a material change has happened.
How does it differ from a recovery plan and from a wind-down plan?
A recovery plan shows how the firm would restore its position and carry on; a solvent exit analysis shows it could stop taking deposits and pay everyone; a wind-down plan is the FCA’s version for firms it regulates on its own. SS2/24 asks firms to treat solvent exit preparation as complementary to recovery planning and lets them draw on that work (paragraph 1.7).
| Question | Recovery plan | Solvent exit analysis | Wind-down plan |
|---|---|---|---|
| Rule or guidance | Recovery Plans Part chapters 2 to 6; SS9/17 | Recovery Plans Part chapter 7; SS2/24 | FCA Wind-down Planning Guide; MIFIDPRU 7.5.7R for investment firms |
| Who | UK banks, building societies, PRA-designated investment firms and qualifying parents | Non-systemic UK banks and building societies | FCA solo-regulated firms |
| The question | How to restore the firm’s financial position after a significant deterioration | How to cease PRA-regulated activities while remaining solvent | How to cease regulated activities and have the permission cancelled with minimal harm |
| End point | A stable and sustainable firm | Deposit-taking removed from, or cancellation of, the Part 4A permission | The FCA cancels the Part 4A permission |
| Review | At least annually; every two years for an SDDT | On material change and at least every three years | Refreshed periodically and after material change |
| Goes to the regulator | Submitted to the PRA | Provided to the PRA on request | Used by the FCA in assessing financial resources |
Source: PRA Rulebook, Recovery Plans Part, rules 2.2, 2.3, 4.2, 7.1, 7.3 and 7.4; PRA SS9/17 paragraphs 1.2 and 2.1; SS2/24 paragraph 1.3; FCA WDPG 1.1.1, 2.1.1, 3.1.5 and 3.2.3; FCA TR22/1 paragraph 2.9.
Drawing on recovery work has a limit. The PRA said it is “prudent for a firm not to assume that existing recovery options will be appropriate or available for a solvent exit” (PS5/24 paragraph 2.22), and the exit actions must include transferring or repaying every deposit (SS2/24 paragraph 2.5). SS9/17 no longer carries a wind-down analysis of its own: its sub-section on the subject is marked deleted. The contents list for an execution plan was drawn up to match the FCA’s Wind-down Planning Guide where possible (SS2/24 Annex A, footnote 53), so a group with PRA and FCA firms can work from one structure. Our wind-down plan template follows the FCA guide section by section.
What should the board test?
Whether it would decide in time, and whether the money would last until the last deposit is repaid. SS2/24 expects a named executive to be accountable, decisions to be made in time with the approvals they need, and the board or a senior committee to challenge and approve the execution plan if one is needed (paragraphs 2.20, 2.24 and 3.3). Directors should also know their own duties: during an exit the firm has to decide whether and when insolvency procedures should be invoked (paragraph 3.11).
The PRA’s own illustrations show where the decision point sits for an SDDT. In a hypothetical case study on the Single Capital Buffer, a loss-making firm working through its buffer “identified that it would breach its Solvent Exit capital trigger in 3 months and TCR in 6 months”. When its last potential investor fell away, the board chose a solvent exit; the firm repaid all deposits the following year and stayed above its total capital requirement throughout (SoP5/25, Annex, Case Study E). The trigger sat inside the buffer and above the requirement, and that spacing is what the analysis has to produce.
A readiness checklist for the board, each item tied to SS2/24:
- Does the analysis name the absolute minimum resources for a successful exit, and do the indicators fire far enough above it to write and carry out an execution plan (paragraphs 2.7 and 2.15)?
- Have we costed the exit itself: haircuts, specialist fees, redundancy and retention, contract termination and any pension deficit (paragraph 2.15)?
- Could we repay or transfer every deposit, including those held through aggregators, those of untraceable customers and accounts awaiting probate or under sanctions (Box B)?
- Can we produce the single customer view file and keep the systems and staff that run it until the end (paragraph 2.16 and footnote 30)?
- Have we found the commitments that outlast the exit, such as long leases, contract penalties and outsourcing, and taken reasonable steps to reduce them now (paragraphs 2.11 and 2.16)?
- Could we refresh the balance sheet, exit valuations and capital, funding and liquidity projections in a reasonable time, and would any external specialists have the data they need (paragraphs 2.22 and 2.23)?
- Is there a named accountable executive and a decision route that still works in a stress, including any parent, home regulator or member approvals (paragraphs 2.20 and 2.24, footnote 36)?
- Has someone other than the author challenged it, and can we hand the PRA the current version on request (paragraph 2.25; rule 7.4)?
Our wind-down and solvent exit service writes or reviews the analysis, and our recovery planning work builds it on the same model as the recovery plan. RisKIT model 900 supports the solvent exit analysis in open Excel, and our guide to recovery plan indicators covers how the two sets of indicators fit together.
Questions readers ask
Do we have to send the solvent exit analysis to the PRA?
Not routinely. The firm must be able to provide the current version to the PRA on request (Recovery Plans Part rule 7.4), and the PRA said its supervisors would communicate with firms as appropriate about any request (PS5/24 paragraph 1.10).
Can the solvent exit analysis sit inside the recovery plan?
Yes. SS2/24 paragraph 2.3 says a firm may include it as a discrete section of its recovery plan, or set it out separately if it finds that more appropriate.
Are solvent exit indicators automatic triggers?
No. The PRA clarified that they are intended to inform a firm when it may need to initiate a solvent exit, “but they are not automatic triggers for a solvent exit” (PS5/24 paragraph 1.6). They should support clear and timely decisions alongside other relevant information (SS2/24 paragraph 2.8).
Can the assurance be done internally?
Yes. Assurance can be internal or external, for example a review by internal audit or external specialists and challenge from the board, including non-executive directors (SS2/24 paragraph 2.25 and footnote 37). The PRA may also seek its own assurance, including through a section 166 skilled person review (footnote 40).
Sources: PRA SS2/24 Solvent exit planning for non-systemic banks and building societies (March 2024, effective 1 October 2025), paragraphs 1.3, 1.7, 2.1 to 2.25, 3.3 and 3.11, Box B, Annex A and footnotes 1, 2, 4, 30, 36, 37, 40, 47 and 53; PRA Rulebook, Recovery Plans Part, rules 2.2, 2.3, 4.2 and 7.1 to 7.4; PRA PS5/24 (12 March 2024), paragraphs 1.3, 1.6, 1.9, 1.10, 2.18 and 2.22; PRA PS10/26 (26 March 2026), paragraphs 2.8 and 2.9; PRA SS9/17 Recovery planning (March 2026), paragraphs 1.2 and 2.1 and sub-section (g); PRA SoP5/25 (July 2026 version), Annex, Case Study E; PRA PS20/24 Solvent exit planning for insurers (18 December 2024); FCA Handbook, Wind-down Planning Guide, WDPG 1.1.1, 2.1.1, 3.1.5 and 3.2.3; FCA TR22/1 Observations on wind-down planning (11 April 2022), paragraph 2.9. Accessed 10 October 2026.
How we research and check our articles: our editorial policy.
