Whistleblowing in the UK: transparency and accountability

In recent years, whistleblowing has emerged as a critical mechanism for promoting transparency and accountability in the financial services industry. From high-profile scandals to ground-breaking legal settlements, whistleblowing is becoming more prominent, supported by evolving legal protections. Tribunal statistics for Q4 2024/25 highlight this trend, revealing a notable increase in employment-related claims, including those involving public interest disclosures. But with prospective changes to whistleblowing on the horizon, financial services firms must treat whistleblowing not just as a compliance obligation, but as a core component of risk management and ethical governance.

The growing importance of whistleblowing

The increasing importance of whistleblowing to employees and employers is evidenced by available data. Ministry of Justice statistics show a dramatic surge in public interest disclosure claims to the Employment Tribunal, with 2,906 cases filed in 2024/25, a jump from just 547 the previous year – a striking fivefold increase.

Moreover, the Financial Conduct Authority’s (FCA) latest Prescribed Persons Annual Report reveals a further upward trend in whistleblowing activity. Between April 2024 and March 2025, the FCA received 1,131 whistleblowing reports, leading to 908 direct regulatory actions.

The rise in the use of whistleblowing is being driven by a number of factors. First, employees are becoming more informed about their rights under the Public Interest Disclosure Act 1998 (PIDA), which protects whistleblowers from unfair dismissal and detriment. This awareness is empowering more individuals to come forward when they witness wrongdoing. Of those choosing to make a complaint, a growing number of those protected by the PIDA are choosing to bypass internal reporting mechanisms, opting instead to take their concerns directly to the FCA. This trend suggests a lack of trust in internal processes or fear of retaliation within organisations.

Several high-profile whistleblowing cases have also boosted public awareness of whistleblowing while the changing nature of work, coupled with economic uncertainty, has created an environment where unethical practices can flourish. With employees more vigilant, an increasing number of cases of misconduct are being brought forward.

Anticipated legislative and regulatory developments to whistleblowing

The legal framework surrounding whistleblowing in the UK is evolving. The proposed Employment Rights Bill (ERB) will introduce sexual harassment as a standalone category of wrongdoing for whistleblowing disclosures, broadening the scope of protected disclosures. In a recent amendment to the ERB, it also looks likely that allegations of harassment or discrimination won’t be prohibited by a Non-Disclosure Agreement (NDA). This is in response to NDAs being widely used to include so-called gagging clauses that prevent employees from making allegations on the termination of their employment.

In another amendment, the ERB states that subsequent regulations, to be introduced within six months of the ERB becoming law, will extend the circumstances in which an employee is considered unfairly dismissed after making a protected disclosure. It will also require employers to take reasonable steps to investigate any disclosure made to them under the relevant existing whistleblowing legislation. These provisions will only be applicable to employers with:

• 50 or more employees
• an annual business turnover or annual balance sheet total of £10m or more
• operations in financial services
• vulnerabilities in other respects to money laundering or terrorist financing.

In addition to the protections outlined by the ERB, regulators are playing a more active role in encouraging and protecting whistleblowing. The FCA, for example, has been vocal in its support for whistleblowers and in 2024 published findings from a survey on workplace culture, urging employers to foster a “speak-up” culture and provide safe avenues for reporting.

The FCA’s latest figures highlight the critical role whistleblowing channels play in surfacing workplace issues. Between 2021 and 2023, reports of non-financial misconduct were on the rise, with nearly half of all identified incidents brought to light through whistleblowing or grievance mechanisms. These processes not only empowered employees to raise concerns but directly contributed to 43% of cases proceeding to formal disciplinary action, demonstrating how effective whistleblowing frameworks are essential for detecting and addressing misconduct. Building on this, the FCA confirmed this summer that serious non-financial misconduct will now breach the Conduct Rules (COCON). Extending these rules to 37,000 non-bank financial firms from September 2026 reinforces the FCA’s commitment to tackling misconduct surfaced through whistleblowing and promoting healthier workplace cultures.

Another body lending its support to strengthened whistleblowing action is the Royal United Services Institute (RUSI), which argues in a recent report that the UK’s current whistleblowing framework lacks the teeth needed to encourage disclosures in high-risk sectors like finance. It points to the stark contrast between the UK and the US, where whistleblowers contribute to the majority of enforcement actions. The Serious Fraud Office has also called for a UK reward scheme, but stresses that such a move must be part of a wider package of reforms, including stronger protections, better infrastructure and cultural change within enforcement bodies.

Amid the growing support for strengthened whistleblowing protections, the government has introduced the Failure to Prevent Fraud offence under the Economic Crime and Corporate Transparency Act 2023, marking a pivotal moment in corporate accountability. Coming into force on 1 September 2025, this offence holds large organisations (those with turnover exceeding £36m, a balance sheet exceeding £18m or more than 250 employees) criminally liable if an employee, agent or subsidiary commits fraud intending to benefit the organisation, and the organisation lacks reasonable fraud prevention procedures. This legislative shift places whistleblowing at the heart of fraud prevention. Financial services firms in scope of the offence are expected to foster an anti-fraud culture, where employees feel safe to report misconduct.

Implications of whistleblowing claims for firms

The rise in whistleblowing claims, and a potential shift in the legislative landscape, carries implications for financial services firms. For regulated firms, failure to maintain effective whistleblowing procedures could lead to enforcement action, reputational damage and increased scrutiny under the Senior Managers and Certification Regime (SM&CR). To mitigate these risks and align with regulatory expectations, firms should take the following actions:

• Robust whistleblowing policies: employers should make sure they have clear, accessible and effective whistleblowing procedures. It should be clear to all employees how concerns can be raised so that employers can reasonably investigate any disclosure. Organisations should also ensure that all disclosures can be investigated independently and confidentially, mitigating the risk of retaliation or interference by the alleged perpetrators.
• Training for HR professionals: human resources teams will need to play a pivotal role in handling whistleblowing reports. Comprehensive training is essential to ensure fair, consistent and legally compliant responses to disclosures.
• Settlement agreements and NDA templates: these should be updated to ensure that whistleblowing disclosures are not prohibited (which may soon include allegations of harassment and discrimination) and that appropriate signoffs are in place prior to execution.
• Supportive workplace culture: creating a culture where employees feel safe to raise concerns is crucial for effective whistleblowing. This involves leadership commitment, open communication and visible support for those who speak up.
• Compliance and compensation risks: employers should be aware that compensation in whistleblowing cases is uncapped and can increase by up to 25% if an organisation unreasonably fails to follow the applicable Code of Practice. This adds a financial incentive to ensure compliance.

Whistleblowing compliance: FCA expectations and fraud prevention

We expect whistleblowing claims to continue to grow as protections and enforcement of these claims increase. Discussions around the US approaches and EU Whistleblowing Directive are also influencing domestic debates and may inspire further reforms. Beyond legal changes, whistleblowing is becoming a key indicator of organisational integrity, with poor governance and enforcement of these claims a potential source of reputational damage.

For employers, the message is clear: proactive engagement with whistleblowing is no longer optional, it is a vital component of risk management, legal compliance and ethical leadership. To remain compliant and give confidence to all stakeholders, businesses should:

• Align with FCA expectations: ensure whistleblowing policies meet the FCA’s guidance and are integrated into SM&CR responsibilities.
• Conduct regular culture audits: use employee surveys and independent reviews to assess the effectiveness of the speak-up culture.
• Prepare for the Failure to Prevent Fraud offence: review internal controls and ensure whistleblowing channels are part of the fraud prevention strategy.
• Engage boards and senior managers: ensure whistleblowing data is reported to the board and used to inform risk and compliance decisions.

The rise in whistleblowing claims in the UK reflects a profound shift in workplace culture and employee expectations. As more individuals feel empowered to report wrongdoing and legislation tightens, firms must respond with robust systems, supportive environments and a commitment to transparency.

Contact a member of our team and find out how we can help you stay compliant with current and future financial services regulation.

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