| Link(s): | Interim Chief Executive’s Statement – Budget Update | FSCS FSCS Budget Update January 2025 | FSCS FSCS Budget Update January 2025 |
Context
The FSCS Interim Chief Executive, Martin Beauchamp, has published the latest FSCS Budget Update which focuses on the FSCS management expenses, and its plans for April 2025 to March 2026. In relation to the management levy, you can find the full 2025/26 levy forecast, including the compensation FSCS expects to pay over the year, in last November’s FSCS Outlook. The FSCS will provide its next full levy update in the spring.
Key points to note and next actions
- For 2024/25 FSCS remains on track to be within the management expenses budget of £103.1m. The FCA has recently consulted on the FSCS Management Expenses Levy Limit for 2025/26, which is £108.6m, which includes a £5m unlevied reserve on top of the core budget. This reserve is the same as the 2024/25 financial year.
- The majority of the FSCS budget covers claims-handling decisions by 18% year-on-year and maintained its high customer satisfaction and quality scores.
- During the first half of 2024/25, FSCS increased claims decisions by 18% year-on-year and maintained its high customer satisfaction and quality scores.
- Next year FSCS comes to the end of its three-year plan to build its in-house claims-handling capability. This major change to its operating model has given FSCS greater control and flexibility to handle the variety of claims it receives
- In 2025/26 FSCS will keep the level of investment the same as in this financial year. This will enable it to build on the existing positive changes, to lay the foundations for future advice claims transformation and deliver further enhancements to depositor protection
- Most of the components of the FSCS annual management expenses are expected to fall, other than for staff costs (including contractors), facilities, IT and overheads