Link(s):FSCS 2020/21 Annual Report and Class Statements
Context
The Financial Services Compensation Scheme (FSCS) helped more than 52,000 customers across the UK during 2020/21. The number of customers helped varies depending on the types of firms that have failed during the year. For example, in 2019/20, FSCS helped more than 250,000 customers as it dealt with some large insurance failures involving tens of thousands of policyholders. FSCS either paid customers compensation or enabled them to transfer to a new financial provider for their investment or insurance policy. In its Annual Report and Accounts and Class Statements published Thursday 1st July 2021, FSCS outlines the work it carried out during the past financial year.
Key points to note
- FSCS’s compensation costs for the year were £584m, an increase of £57m from 2019/20 (£527m).
- FSCS continued to reduce its operating costs, with like-for-like costs of handling claims decreasing by three per cent in 2020/21. This was on top of the eight per cent reduction in like-for-like claims handling costs in 2019/20.
- FSCS paid compensation to customers who had experienced losses from 1,131 failed firms, including 92 firms that failed during 2020/21.
- The vast majority (98 per cent) of customers who came directly to FSCS did so using its online claims service and those who came directly received 100 per cent of the compensation they were owed.
- A total of 31,737 claims were automatically processed, making the experience simpler and faster for FSCS customers.
- In 2020/21, FSCS was financed by levies from 45,227 regulated financial services firms.
- The financial year 2020/21 was FSCS’s most productive operational performance year to date despite an increase in the number of complex claims and remote working by FSCS’s people due to Covid-19. This included 99,528 claims decisions being made, of which more than 52,000 resulted in either paying people compensation or helping them transfer to a new investment or insurance policy.
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