The Financial Services Compensation Scheme (FSCS) will levy £337m in the financial year 2016/17, £26m less than forecast in its Plan and Budget for 2016/17, published in January.
The levy in 2015/16 totalled £319m.
Most industry sectors will contribute less in 2016/17 than FSCS forecast in January. The exception is the life and pensions intermediaries sector, which will pay a levy of £90m in 2016/17 – up from a forecast of £80m, to reflect a higher average cost of claims arising from advice about investments in self-invested personal pensions (SIPPs). In 2015/16, life and pensions intermediaries paid a levy of 100m.
Management expenses fall for the second successive year. In 2016/17, these will total £67.4m.
In addition to the overall levy, FSCS will recover interest costs – also £337m – from Treasury loans for Bradford and Bingley and Kaupthing Singer & Friedlander during the banking crisis in 2008.
Mark Neale, chief executive of FSCS, said: “The annual levy allows us to compensate customers. That generates consumer confidence and trust in the industry.
“We look forward to the forthcoming review by the Financial Conduct Authority into how FSCS is funded, and will play our part in discussions. I encourage the industry to play a full role in the debate.”
Since FSCS was created in 2001, more than 4.5m people have received in excess of £26bn in compensation claims against the financial services industry.”