The Financial Services Compensation Scheme said its overhead budget for the year to March next year will be £103.6 million, an increase of 0.5% on the current budget.
However, the agency’s industry tax will rise by 49% to £394m as it “expects a smaller surplus”, the agency confirmed in its outlook earlier in November.
The agency, which handles consumer claims against failed financial companies, said “cash surpluses have kept tax collections below compensation levels for the past two financial years.”
“This is no longer the case for the 2025/26 academic year as most categories of fees have been exhausted, resulting in higher overall levies.”
FSCS interim chief executive Martyn Beauchamp said in today’s update: “The majority of our budget is used to cover claims processing costs.
“It also funds other important activities including pursuing recovery, investment to improve organizational efficiency, raising consumer awareness of FSCS protections and the claims service we provide free of charge to customers at the point of use.”
Beauchamp added: “A major part of the FSCS’s work currently is claims, whose increasing complexity can lead to increased costs and means claims often require more specialist resources and more in-depth investigation.
“For example, the average amount of data we receive per claim has increased by 89% over the past two years.”
