The Financial Services Compensation Scheme (FSCS) has confirmed that its 2025/26 levy remains unchanged at £356m as forecast in May 2025, while the total levy for 2026/27 is expected to drop slightly to £342m, thanks to an anticipated reduction in compensation costs compared to 2025/26. 

The FSCS explained that this anticipated fall in compensation costs is being driven primarily by fewer claims involving self-invested personal pension operators.

Additionally, some funding classes are expected to begin the period with lower opening balances, as surpluses carried over from previous years have been effectively utilised, which brings the forecasted levy for these classes in closer alignment with projected compensation costs. 

The initial view on the 2026/27 levy is expected to support the financial services industry in its planning for the year ahead.

Commenting on the update, FSCS chief executive, Martyn Beauchamp, said: “As a responsible steward of the levy, we remain focused on reducing costs to firms wherever possible while delivering the best outcomes for our customers. 

"That’s why we proactively pursue recoveries, and now expect to recover almost £40m by year-end, £5m more than forecast in May. Our recoveries help to offset the levy for firms and ensure those most responsible for financial harm are held to account.

“FSCS plays a crucial role in maintaining confidence and trust in financial services, which are essential for a stable and growing economy. 

"That confidence relies on our readiness to respond quickly when firms fail. To deliver on this, we’re simplifying our processes to speed up claims and payments for our customers. We’re also enhancing our insurance claims systems to ensure people can continue accessing the products and services they depend on with minimal disruption. 

“2025/26 is a pivotal year as we shape our next five-year strategy. Our priority remains staying future-fit and ready to deliver for customers and industry alike.”

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