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| FSCS spring forecast sets levy at £247m for 2026/27 | FSCS Chief Executive’s statement – May 2026 Outlook | FSCS Outlook May 2026 | FSCS FSCS Outlook May 2026 |
Context
FSCS has announced the publication of its May 2026 ‘Spring’ Outlook, which is accompanies by a statement from Martin Beauchamp, the FSCS Chief Executive. The forecast sets the FSCS levy at £247m for 2026/27, the levy being the total amount payable by firms. This figure is £95m lower than the November 2025 forecast.
Key points to note
- In 2025/26 FSCS recovered £34m from the estates of failed firms and relevant third parties, with performance in 2025/26 exceeding the annual average for the previous five years. These recoveries help offset the levy paid by financial services firms.
- FSCS expects to pay £267m in compensation to customers during 2026/27. This is £27m lower than the early forecast set out in our November 2025 Outlook.
- The 2026/27 levy forecast also reflects higher surpluses carried forward from the previous year. This was driven in part by:
- A shift towards higher volumes of lower-value advice claims, alongside fewer higher-value pensions and SIPP operator claims;
- A higher proportion of Section 27 claims where no compensation has been due;
- Credit union failures remaining steady, however with fewer affected members resulting in lower-than-expected compensation costs; and
- Lower insurance costs from historic failures.
- Taken together, these factors, alongside strong recoveries and continued cost-efficiency, have contributed to the levy now expected to be £95m lower than the FSCS November forecast.
- The levy for the General Insurance Provision class has decreased from £113m to £88m. No new firm failures are currently expected in this class in 2026/27. The reduction in the forecast levy is partly driven by a higher opening balance. FSCS anticipates lower costs from historic failures as the scheme continues to progress outstanding claims from legacy insurance estates.
- There remains no requirement for firms in this class to pay provider contributions to the General Insurance Distribution class in 2026/27.
- In his statement, Beauchamp discusses his reflections on 2025/26, ‘Readiness, resilience and confidence’, and looking ahead to 2026/27.