| Link(s): | FSCS 2026/27 budget | FSCS FSCS Budget Update January 2026 | FSCS FSCS Budget Update January 2026 Budget Update – Chief Executive’s Statement | FSCS |
Context
Alongside the publication of the FCA’s and PRA’s joint FSCS Management Expenses Levy Limit (MELL) 2026/27 Consultation, the FSCS has announced the publication of its January 2026 Budget update. The update is accompanied by a Chief Executive’s Statement from Martyn Beauchamp. The Update confirms that the 2026/27 budget will be in line with inflation, and that the 2025/26 budget remains unchanged.
Key points to note and next actions
- Following recent regulatory developments, including the Bank Resolution (Recapitalisation) Act and an increase to the deposit protection limit, FSCS is working closely with HM Treasury and the Bank of England to raise its current revolving credit facility (RCF). This includes a projected uplift to the RCF from £1.45bn to £3bn. This will ensure that FSCS can continue paying compensation quickly, as well as provide sufficient funds to the Bank of England to enable the speedy resolution of a failing deposit taking institution.
- The total management expenses include:
- controllable costs such as rent and expenses related to critical business support functions including HR, IT, and its revolving credit facility (RCF);
- volume and complexity-driven costs that are sensitive to changes in the number and types of claims FSCS receives;
- organisational investment in ongoing system and process improvements; and
- an unlevied reserve, which enables FSCS to raise additional funds at short notice to cover unforeseen costs when the management expenses were originally set. The unlevied reserve is not included in the FSCS levy bill and is only invoiced to firms if needed.