| Link(s): | FSCS confirms reduced levy of £356m for 2025/26 and £56m of recoveries in 2024/25 | FSCS Outlook May 2025 | FSCS Chief Executive’s statement – May 2025 Outlook | FSCS FSCS Outlook May 2025 |
Context
The FSCS has announced the publication of its May 2025 Outlook, which is accompanied by a statement from the FSCS Chief Executive Martyn Beauchamp.
Key points to note and next actions
- FSCS ended 2024/25 broadly in line with November’s forecasts for compensation.
- FSCS successfully recovered more than £56m from the estates of failed firms and relevant third parties during 2024/25. These recoveries reduce the levy for financial services firms, or they are distributed as additional payments to customers.
- The annual levy for 2025/26 is now £356m, £38m lower than November’s forecast.
- FSCS currently expects to pay £332m in compensation to customers during 2025/26, £36m lower than November’s forecast. The majority of this change relates to lower compensation costs in the Life Distribution & Investment Intermediation (LDII) class. All other classes are broadly in line with November’s forecast.
- Beauchamp commented on what he saw as a strong year for recoveries, and confirmed that FSCS has now fully transitioned to its new claims service operating model. This has allowed FSCS to deliver a high volume of customer claim decisions last year