| Link(s): | PS25/8: FCA regulated fees and levies 2025/26 | FCA PS25/8: FCA regulated fees and levies 2025/26 CP25/7: FCA regulated fees and levies: rates proposals for 2025/26 |
Context
The FCA has published its final Fees and Levies rates and information for 2025/26 in Policy Statement PS25/8, following the earlier Consultation. The Consultation proposals included the proposed levels of fees and levies, amending the FEES manual to align with the Money Laundering Regulations, and some minor amendments to certain sections to improve readability, remove obsolete definitions and update references. The FCA is also seeking industry views on whether it should change its draft rates modelling approach.
Key points to note and next actions
The confirmed Annual Funding Requirement (the AFR – what the FCA expects that it will cost to run itself during the financial year) is £783.5m, comprising the baseline ‘ongoing regulatory activities’ (ORA) costs and exceptional projects.
Fees are increasing almost across the board (which need to be considered in the context of the number of firms in each fee block reducing in almost every case), with increases being:
- General insurance mediation – £0.8m (2.2%) from £38m to £38.8m
- Principal firms – £0.2m (3%) from £7.1m to £7.3m
- Consumer credit firms – 2.3%
- Claims management firms – 3.1%
- Funeral plan intermediaries and providers – 0.9%
In line with the ongoing phased increase in minimum fees for consumer credit firms, the minimum fees payable will range (dependent on consumer credit-related income) from £800 to £1,100 for Limited Permission firms, and from £1,500 to £2,000 for ‘full’ permission firms.
The FCA is proposing to raise application fees in line with the 2.5% increase in the ORA budget and round them to the nearest £10.
In relation to its motor finance exceptional project cost recovery proposals (how to recover the £6.9m costs of its review of the historical use of discretionary commission arrangements (DCAs) in the motor finance sector), the FCA will recover the costs from variable fee-paying lenders that sold a motor finance credit agreement between 2007 and 2021 which included a DCA, under a new fee block, CC4. The FCA will, however, keep this position under review, including whether to charge its costs to relevant motor finance brokers (e.g., motor dealerships). This position will be informed by the upcoming Supreme Court decision. Within 6 weeks of that decision, the FCA will confirm whether a redress scheme will be proposed and, if so, how it will be implemented. The FCA will also consult on any scheme, including whether a scheme would apply to motor finance lenders and/or brokers.
Firms can use the online fees calculator to calculate their individual fees based on the final rates in this Policy Statement. This includes FCA periodic fees and the Financial Ombudsman, and Money and Pensions Advice Service final rates. The fees calculator will also cover the Financial Services Compensation Scheme levy. The FCA will invoice fee-payers from July 2025 onwards for their 2025/26 periodic fees and levies