As far back as 2019, The Actuary (the magazine of the Institute and Faculty of Actuaries) was reporting on a ‘talent crisis’ in financial services, with the sector seen as ‘boring’ and failing to offer adequate social mobility. Fast forward to 2025, the AAT (the Association of Accounting Technicians) published its own report, ‘Filling the Gap: Closing the UK's finance and accounting skills gap’, which found that 35% of finance and accounting firms struggled to recruit during 2025, 26% have gaps across many or all business areas and 78% of all employers face at least some skills gaps.
In a sector that exists to assess risk, the shortage of suitably qualified people entering the profession raises its own serious risks about how operations, growth and compliance may be impacted. We examine the effects that a talent shortage may have on the industry and look at what organisations can do to attract, retain and develop the professionals that they need.
Changing skillsets
Over the last few years, the skillsets required for actuarial work have changed dramatically. Previously, the main focus was on good maths skills, excellent exam results and technical modelling abilities. However, due to the proliferation of technology within the profession, employers are now looking for programming and data skills, business awareness, the ability to communicate effectively and proficiency in AI and automation as well. In other words, employers now want a blend of actuarial, data and business specialisms, rather than just technical ability. This combination is proving challenging to source.
Added to this is the problem of perception. Two reports published over the last two years by Free, a marketing agency for insurers, reveal the crisis that the finance sector faces at the moment. The first, ‘The Inside Story: What new talent thinks about working in insurance’ found that despite 94% of insurance employees being ‘somewhat’ satisfied and 72% being ‘very or extremely’ satisfied with their career choice, the second, ‘The Regeneration Report: How to beat the insurance talent crisis’ revealed that insurance came last in a list of twelve areas of work that young people found most appealing, behind Business (1), Professional Services (5) and Retail and Sales (11). The latter report also mentioned that 50% of the insurance workforce is over 40 years of age, 26% are over 50 and 25% are due to retire within the next 10 years.
These issues, the skills gap and the industry’s inability to attract more young people into it, are impacting productivity, quality and adding workload stress to existing employees. This is directly affecting several business areas.
Transformation issues
Business and digital transformation programmes rely heavily on the input of finance and actuarial teams to check assumptions, stress-test scenarios and translate strategy into figures that ensure that the changes make economic and business sense. With 76% of private UK businesses now undertaking some form of business transformation (up 137% from the previous year), the impact of a lack of actuarial specialists on these programmes is immediate. Validation stages take longer, productivity is reduced, decision-making is left to a smaller number of overstretched employees, meaning that the quality and pace of delivery is affected and risks become greater.
In terms of actuarial work, this means that modelling, pricing and capital management work, which cannot be outsourced to less experienced colleagues, may be delayed and have an incremental effect on other aspects of the programme. This results in slower and more expensive transformation programmes, without the levels of strong internal challenge that are usually present.
Regulatory requirements
The UK’s financial regulations are among the strongest and most balanced in the world and have been designed to encourage global competitiveness, maintain governance and protect consumers, tempered by proportional oversight. However, maintaining levels of compliance with ongoing regulatory changes is a challenge for most finance firms. Regulators expect high levels of judgment, technical accuracy and a coherent understanding of how the rules apply to specific aspects of the finance industry. Expectations of actuaries in this context include levels of expertise in governance, reporting and accountability which only comes from years of experience and expertise.
A shortage of skilled professionals makes those things more difficult to achieve in two important ways:
Execution – teams that are under-resourced, and therefore, stretched, are more likely to make errors, miss subtle nuances and rely on manual processes. Fewer specialists involved with the process can increase inconsistencies and inaccuracies, potentially leading to regulatory penalties, including fines, as well as reputational damage.
Interpretation – ever-changing regulations increasingly require professional judgement to determine what’s required and to apply the new rules to their own products and models effectively. The less experienced a team is, the more difficult it is to apply the requirements of new regulations without leading to overly cautious or simplistic outcomes.
It’s now apparent that skills shortages are beginning to affect how UK firms respond to regulatory change. This may not immediately present as non-compliance but it does increase the risk of less consistent decision-making and increased exposure, making firms more vulnerable.
Resilience Implications
The skills shortage also raises questions about the sector's resilience. Organisations’ finance and actuarial functions play a pivotal role in ensuring that they understand risk successfully, allocate capital efficiently and plan ahead productively. However, when there is pressure on those teams, organisations may not be able to respond to change effectively enough.
This may result in:
-
Increased dependence on outsourcing, sometimes to overseas staff
-
Disproportionately higher workloads for experienced staff, sometimes leading to burnout and possible resignations
-
Reduced capacity for forward-looking analysis.
While none of these things disrupts operations immediately and independently, they can accumulate to weaken an organisation’s resilience over time.
In a broader context, this erosion of resilience will also eventually affect the UK’s competitiveness. Evidence gathered on behalf of the UK Parliament by the Financial Services Skills Commission in 2022 highlighted serious and ongoing shortages in specialist finance roles, and warned of ‘losing the war for talent’ if collective action is not taken. It’s clear that matters have not improved since then and the situation has the potential to damage the UK’s productivity and long-term growth prospects.
What needs to change?
There is no simple answer to the talent crisis in actuarial and finance but the organisations that are dealing with it best are the ones that have acknowledged the problem and are responding proactively.
There are several ways in which firms can deal with it:
Wider entry routes – traditional, academic pathways into the profession, while still relevant, tend to limit the supply. Alternative approaches include extending apprenticeships and school-leaver outreach programmes, focusing on skills rather than qualifications alone and targeting underrepresented groups in an effort to improve social mobility. This is particularly important in light of findings published in 2019 which noted that two in five (55%) of people working in British banking had parents who also worked in the sector, resulting in a ‘narrow and narrowing talent pool and not enough social mobility’. This type of research led indirectly to the establishment of The Financial Services Skills Commission, which aims to ensure that the industry has the talent and skills it needs to avoid problems in the future.
Training and development – when less experienced actuaries are given excessive responsibilities simply because there’s a shortage of more senior staff, risks increase. Therefore, it’s vital that all actuarial and finance staff are given continuous training to maintain capability. The AAT report that 84% of UK employers face barriers to upskilling their workforce which has led to a drop in productivity and a reduction in the quality of the work. Challenges included a lack of time for training, the cost of training programmes, limited employee engagement and a shortage of suitable options. Priorities to ensure a future-ready workforce include technical knowledge, data capability and commercial awareness.
Upgrading an EVP – despite actuarial salaries starting at around £32,000 for a graduate (higher than the average UK figure) the remuneration aspect of the role is secondary to the other benefits that firms need to offer in order to attract talent into the industry, especially when it comes to Gen Z. A firm’s EVP (Employee Value Proposition) also needs to offer clear progression pathways, a sense of meaningful work and flexible working arrangements that encompasses women, people with disabilities and neurodivergent needs, people from a variety of socio-economic backgrounds, part-time workers, carers and returners.
In summary
The actuarial and finance skills gap has been building over many years and seems unlikely to be resolved quickly. Issues affecting it include technology, regulation, changing demographics, attraction and retention strategies and evolving expectations of work, and if it is allowed to continue it will inevitably affect transformation programmes, limit long-term resilience and weaken regulatory compliance. It’s now down to the industry itself, in partnership with relevant organisations, to confront the issues and deal with them in order to minimise the risk that this challenge presents.
For more information about how Brighter can support your organisation in developing strategies that attract the talent that you need, contact us.
