UK Financial Services Compensation Scheme outlines levy distribution across firms for 2019/20
The bulk of levy payers, 59%, will pay less than £50, whereas over 4,500 firms will not pay any levy.
The UK Financial Services Compensation Scheme (FSCS) has today published indicative numbers on how its levy will be distributed across firms in 2019/20.
Of the 46,000 firms to pay FSCS’s levy this year, the majority of levy payers, 59%, will pay less than £50. Over 4,500 firms will not pay any levy, instead they will each receive an average rebate of £139.
In contrast, the top 110 firms, comprising 0.2% of the total levy paying population, will pay an average of £3 million, nearly 61% of the total levy bill.
These are the current forecasts for FSCS’s 2019/20 levy figures, although, as in past years, it may be necessary for FSCS to raise additional levies.
Caroline Rainbird, FSCS CEO explains,
“The levy enables FSCS to protect thousands of people each year who have nowhere else to turn when financial service firms fail. Our staff focus on the need for value for money, whilst working hard to deliver an effective and empathetic service to customers, many of whom are in a really tough place. Their professionalism also helps to restore consumer confidence in the financial services industry.
“To reduce costs to levy payers we pursue recoveries from the estates of failed firms, and in 2018/19 we recovered £26 million. We also believe that our strategy, FSCS into the 2020s: Protecting the Future will help to further reduce future levies. It focuses on four pillars, Prepare, Protect, Promote and Prevent. As we continue to see a rise in SIPP related claims we are working with our partners in industry through our Prevent pillar to gain valuable insight into the causes of firm failures and about the directors and advisors involved in mis-selling.”
FSCS’s 2018/19 Annual Report shows the Scheme paid a total of £473 million in compensation to 425,760 customers of failed firms during 2018/19. This amount compares with the £405 million FSCS paid in compensation in the previous year. FSCS’s Report also shows the body raised levies on 49,224 regulated financial services firms, with a total levy income of £517 million, to fund the costs of compensation and of running the Scheme.
