UK FSCS Levy Forecast Unchanged
On Nov. 24, UK FSCS confirmed £625mn, plus 2023/24 early forecast.
- UK FSCS's latest edition of Outlook confirmed 2022/23 levy forecast is £625mn, with no additional levy expected this financial year; initial 2023/24 levy forecast is £478mn.
- Follows UK FSCS May 2022, £625mn forecast/report on compensation, see #138880.
- Lower 2023/24 forecast is due to anticipated surpluses including £91mn investment provision class, self-invested personal pension operator claims now expected 2023/24.
- Also £86mn life distribution/investment intermediation, with fewer complex claims.
- All surpluses are carried forward/used to offset 2023/24 levy at financial year end.
- Expects to pay £592mn compensation in 2023/24; around £517mn total in 2022/23.
- Claims on already failed firms account for 80% of 2023/24 anticipated compensation costs; remaining 20% for compensation against firms expected to fail in 2023/24.
- Compensation expected to remain high due to: ongoing complex claims in areas such as pension advice and general insurance; lag between harm/FSCS receiving claims.
- Around 80% needing to bring claims to FSCS did not realize until at least 5 years after.
- Next Steps
- UK FSCS will issue updated 2023/24 levy assumptions in the spring 2023 Outlook.
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|Reg. Last Update
Last substantive update on 11/24/2022