UK FSCS trims annual levy expectations

The UK's Financial Services Compensation Scheme (FSCS) has today lowered its annual levy expectation for 2025/26 to £356m – some £36m lower than its forecast in November.

The FSCS attributes this decline to; the successful recovery of more than £56m from the estates of failed firms and relevant third parties; and decreased compensation relating to the Life Distribution & Investment Intermediation (LDII) class with fewer claims now expected.

Brian Nimmo, Head of Redress at financial services consultancy Broadstone, said: “The lowered predictions for compensation payments in 2025/26 reflect broader trends within the wider redress landscape as pay-outs for consumers reduce in size.

"A movement towards more claims requiring specialist investigation is also emerging with over two-thirds of claims now considered ‘complex’ up from one-third just a few years ago. It highlights the complex financial landscape that both firms and consumer must navigate nowadays alongside the specialist advice that firms require to ensure they are treating consumers fairly."

For further details on the updated levy expectation, visit: https://www.fscs.org.uk/globalassets/industry-resources/publications/outlook/may-2025/fscs-outlook-may-2025-final.pdf