Five of the country's biggest banks have confirmed they will be complying with new rules on bonus payments.
Barclays, HSBC, Lloyds Bank, Royal Bank of Scotland and Standard Chartered will all abide by the Financial Services Authority's (FSA) regulations on remuneration.
Under the rules, banks will have to put in place clawback schemes in order to ensure payments do not reward short-term gains at the expense of long-term stability.
They will also have to spread up to 60 per cent of senior executives' bonuses over a period of three years, with at least half the deferred sum being paid in shares.
Chancellor Alistair Darling said: "I am pleased that the main banks incorporated in the UK have agreed to lead the way in implementing the agreement reached on bank remuneration at the G20, and expect them to set the standard for all other UK and international financial institutions to follow."
The banks will also have to increase disclosure levels for their remuneration schemes.
Recently, PricewaterhouseCoopers warned that new rules on bonuses could allow some countries to gain an unfair advantage if they are not applied globally.
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