| Link(s): | Our November 2023 Outlook | FSCS Outlook November 2023 | FSCS FSCS confirms unchanged 2023/24 levy of £270m and provides early indication of compensation and levy figures for 2024/25 | FSCS |
Context
The FSCS November Outlook includes the latest update on the annual levy for 2023/24. It also provides an early indication of the expected compensation costs for 2024/25 and the associated industry levy. The FSCS Outlook archive was also mentioned.
Key points to note
- Currently, the FSCS expects total compensation payments this year to be £435m, a reduction of £36m from the last forecast published in May.
- The initial levy forecast for the 2024/25 financial year is £415m. This figure is an early indication and subject to change. It is based on the FSCS expected compensation costs totalling approximately £457m during 2024/25.
- Although the levy is expected to increase in 2024/25, due to the lower surpluses carried over from the previous financial year, compensation costs remain relatively stable. For the most recent three years, including the forecast 2024/25, compensation is between £400m – £460m.
- The implications of these details for insurance distributors are that there will be no additional levy requirement in the current 2023/24 financial year, and there is not expected to be any additional levy in 2024/25.
Next actions
None – for information and awareness.