• The Independent Football Regulator has proposed that every EFL and National League club holds at least one month’s wages in cash, with riskier clubs holding up to five months’ operating losses on top
• Owners’ written promises and undrawn credit lines will not count towards the reserve, in a sector where 94% of clubs lost money in 2025/26
• Clubs would build the buffer in thirds, with the full amount due by summer 2030, while Premier League clubs face no fixed starting requirement for now
• The proposals are out for consultation until 18 December, and could still change before they become rules

For years, the safety net at many EFL and National League clubs has been a promise, the owner’s word that the money will be there when the wages fall due at the end of the month, but under plans published by the Independent Football Regulator (IFR), that promise will no longer count.

The regulator opened a six-week consultation on its approach to liquidity on 10 November, proposing that every club below the Premier League keeps a minimum amount of real cash in the bank, with riskier clubs holding several times more, and with written commitments from owners and undrawn overdrafts left out of the calculation because, in the IFR’s words, they are “highly likely to be withdrawn should a club enter into a stress”. These are proposals, not rules yet, and the consultation runs until 18 December, but if they survive, they would change how lower-league clubs are funded.

What Counts as Cash

What a club can count towards the reserve matters as much as the size of it. Two-thirds must be held as unencumbered cash in a UK instant-access account in the club’s own name, or in gilts, US Treasuries or money market funds, while the final third can also come from short-term deposits of up to 35 days, or a share of transfer fees other clubs are contractually committed to pay, discounted depending on how reliable the buyer is.

Undrawn overdrafts, credit lines and written promises from owners do not count, the only exception being a facility that cannot be withdrawn, which a club can ask the IFR to count towards the final third, and only with the regulator’s agreement. Unsold players do not count either, because their value can only be realised in a transfer window, and clubs that have pledged their bank accounts as security for loans, or keep their cash with the same bank that provides their overdraft, may have to move it before it qualifies.

Why Promises Are Not Enough According to the Independent Football Regulator

The regulator’s own State of the Game report, published in October, explains why. It found that 94% of clubs across the top five English divisions were loss-making in 2025/26, despite combined revenue of around £9bn. With losses of £1.7bn, and that more than a quarter of clubs saying they would not survive the month if their owner stopped funding them, two-thirds could not last 90 days, and 17 clubs would lose money even if their players played for free. Between March 2025 and March 2026, 67 clubs needed six or more cash injections from their owners.

The same report shows what happens when a promise is broken. Wigan Athletic entered administration in July 2020, less than a month after a change of ownership, when £6m of funding that had been promised by the new owner never arrived, and a League Arbitration Panel later concluded the club had been “let down” by those who had bought it. A cash reserve held in the club’s own name would not have stopped the money from failing to turn up, but it would have given Wigan time.

IFR chair David Kogan described English football as “standing on the edge of financial disaster”, while chief executive Richard Monks said there was “an urgent need to take action”, adding that the plan “builds in a long lead time for clubs to enable them to stabilise their finances”.

What It Means in Pounds

The IFR has not put a figure on it, but City AM reported that the clubs with the biggest losses could need to hold £10m or more. Paul Quinn, an independent football finance analyst who writes for The Esk, has modelled a typical Championship club without parachute payments, with revenue of around £37m and losing around £21m a year in cash, and estimates that, if it were rated higher-risk, it would need about £11.4m in the bank.

That is roughly four and a half months of the first-team wage bill, or close to a third of everything the club earns in a season, sitting untouched in an account. It is Quinn’s illustration, not an IFR figure, and because it only counts player wages, he says it understates the real requirement.

How a Club’s Risk is Judged

The IFR has not published hard thresholds for each tier, but it will judge clubs on four factors: liquidity and cash flow, debt and solvency, business model and governance. A lower-risk club, it says, covers its running costs from its own income, does not rely on frequent cash injections from its owner, has no large or growing external debt, and has few of its assets pledged as security.

Most clubs will submit their first financial plan in May 2028, with higher-risk clubs possibly asked sooner. From 2028, the risk rating will also take account of mandatory stress tests, which, according to the IFR’s separate Supervisory Strategy, as summarised by The Esk, model a 10% fall in income, relegation and the loss of the club’s main source of outside funding.

The Timeline

Nobody has to find millions overnight. Every club in the top five divisions will need a provisional IFR licence from the start of the 2027/28 season, and from summer 2027, the regulator will tell each club its risk rating and its reserve target, before the reserve is built up in thirds over the following three summers, with full licences due by May 2030.

The IFR does keep a harder option in reserve. Where it is particularly worried about a club, it says it will push for a faster timeline, and if necessary, use its legal powers to impose a formal liquidity requirement, a debt requirement or an order to cut costs.

The Premier League Gap

Premier League clubs face no fixed starting requirement, with the consultation saying the IFR is “not proposing to apply the concept of starting liquidity expectations to Premier League clubs at this stage”, arguing that liquidity risk is less acute in the top flight and that its clubs have “greater access to commercial financing”.

Premier League clubs will still be risk-assessed, and some may be asked to hold more cash, a promoted club would be expected to keep at least the reserve it held in the Championship, a relegated club could be given transitional arrangements, and following the Premier League’s own financial rules will not automatically satisfy the regulator. The approach will be reviewed in 2028.

This is where the plan is most open to criticism. Quinn calls the package “a cash floor, not yet a capital test”, and points out that the paper refuses to count credit lines for EFL clubs because they are likely to disappear in a crisis, while using access to commercial lending as one of its reasons for leaving Premier League clubs out.

There is a timing problem too, because a club builds nothing while it is in the Premier League, when a reserve is cheapest to fund, and then has to start building one in the Championship, straight after relegation has cut its income. The State of the Game report found that clubs relegated in 2024/25 lost 42% of their revenue, around £70m.

What Happens Next

The consultation closes on 18 December. Nor the EFL, the Premier League or the Football Supporters’ Association have commented publicly on the proposals at the time of writing.

Two things are worth watching. The first is whether the tiers survive the consultation, or are softened by clubs who say they cannot find the cash. The second is whether the risk ratings are ever made public, with the IFR saying it will tell each club its rating and Quinn arguing that supporters and local creditors, who pay the price when a club fails, deserve to know which clubs the regulator considers most at risk.

Verdict

The floor is restro-spectively low, and the regulator has apparently admitted it, describing one month’s wages as “materially below” best practice in other industries, where three to nine months of operating costs is typical, and leaving the Premier League out means the clubs facing the biggest drop in income, the ones just relegated, start with nothing put aside.

But for the first time, clubs that have lived from one owner injection to the next will have to show the money is already in the bank, in their own name, rather than promised, and after Wigan, that is a genuine change. Is a month’s wages enough to stop the next Wigan, or will the regulator have to raise the floor in 2028?

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