Operating expenses

12 Months Ended

Dec. 31, 2025

Disclosure of expenses [Abstract]

Operating expenses

Note 10: Operating expenses

	2025 £m	2024 £m	2023 £m
Staff costs:
Salaries and social security costs1	3,846	3,819	3,651
Pensions and other retirement benefit schemes (note 12)	527	526	355
Restructuring and other staff costs	334	327	487
	4,707	4,672	4,493
Premises and equipment costs2	503	454	449
Depreciation and amortisation3	3,477	3,426	2,905
UK bank levy	130	147	150
Regulatory and legal provisions (note 28)	968	899	675
Other	2,786	2,594	2,720
Operating expenses before adjustment for:	12,571	12,192	11,392
Amounts attributable to the acquisition of insurance and participating investment contracts	(191)	(182)	(183)
Amounts reported within insurance service expenses	(414)	(409)	(386)
Total operating expenses	11,966	11,601	10,823

1Including social security costs of £454 million (2024: £428 million; 2023: £371 million).

2Net of loss on disposal of operating lease assets of £10 million (2024: profit of £59 million; 2023: profit of £93 million).

3Including depreciation in respect of premises £101 million (2024: £96 million; 2023: £110 million), equipment £349 million (2024: £400 million; 2023: £388 million), operating lease

assets £1,470 million (2024: £1,410 million; 2023: £1,070 million) and right-of-use assets £182 million (2024: £198 million; 2023: £209 million).

Average headcount

The average number of persons on a headcount basis employed by the Group during the year was as follows:

	2025	2024	2023
UK	60,331	64,334	65,390
Overseas	3,707	1,895	807
Total	64,038	66,229	66,197

Performance-based compensation

The tables below analyse the Group’s performance-based compensation costs between those relating to the current performance year and

those relating to earlier years.

	Performance-based compensation expense			Performance-based compensation expense deferred until later years
	2025 £m	2024 £m	2023 £m	2025 £m	2024 £m	2023 £m
Awards made in respect of the year ended 31 December	343	300	316	83	90	108
Awards made in respect of earlier years	92	96	124	37	34	22
	435	396	440	120	124	130

Performance-based awards expensed in 2025 include cash awards amounting to £225 million (2024: £162 million; 2023: £169 million).