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FSCS publishes its Plan and Budget: 2015/16

The Financial Services Compensation Scheme (FSCS) today announces an indicative levy of £287m for firms in 2015/16. The news comes in the FSCS Plan and Budget out today.

The levy covers compensation and management expenses, excluding the costs of the major bank failures of 2008/09. This compares with total levies so far in 2014/15 of £276m.

The FSCS Plan and Budget: 2015/16 provides its assumptions about future claims volumes as well as an update on its progress against the seven imperatives it published in its five year vision last year. 

The Scheme expects a reduction in the overall volumes of new claims in 2015/16 (25,590 compared to 28,108 in 2014/15), with the number of claims for PPI and mortgage endowments expected to fall (in line with those experienced by the Financial Ombudsman Service and the wider industry).

There is good news for general insurance brokers who will not be due a levy next year. This is because of a higher opening fund balance and the expected fall in claims volumes throughout the year. This compares to a levy for this sector of £38m in 2014/15.

But FSCS expects to see a significant rise in compensation costs arising from advice to transfer pension savings into self-invested personal pensions (SIPPs). 

 

Channel website: https://www.fscs.org.uk/

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