On 28 November 2025, the Prudential Regulation Authority (PRA) published a letter setting out the key findings from its annual assessment of the credit union sector and the actions it expects credit unions to take. The letter has been sent to firms that belong to a group of credit unions with total assets up to £50 million.

The letter identifies two key areas of risk, operational resilience and disorderly failure.

The PRA’s thematic work during 2026 will focus on supporting credit unions to strengthen their operational resilience, including contingency planning for unexpected events and ensuring robust arrangements for replacing key staff and directors. The PRA has attached a separate letter, ‘Operational Risk and Resilience: A Proportionate Approach for Credit Unions’, which sets out its expectations in this area in more detail.

The PRA expects the board of a credit union to proactively monitor their own credit union’s prudential position, its performance against financial forecasts and act in a timely manner in response to any emerging issues. Where the board identifies that the credit union’s activities are no longer sustainable, the PRA expect directors to consider alternatives, engage with the regulators and a trade body (where applicable) in order to reduce the risks of a disorderly failure.

The letter adds that in additional to operational resilience and the risk of disorderly failure, the PRA’s supervision team’s work during 2026 will include a continued focus on risk management. Also, standards of governance remain an area of interest for the PRA.

The letter concludes with a reminder of Fundamental Rule 7 and that should directors of a credit union become aware of any events that are likely to

impact the credit union’s prudential position or ability to continue to offer services to members, the PRA expects to be notified as soon as reasonably possible.