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Mortgage brokers to pay 13% less for Financial Services Compensation Scheme

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  • 18/01/2018
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Mortgage brokers to pay 13% less for Financial Services Compensation Scheme
Mortgage brokers' financial contribution to the management of the Financial Service Compensation Scheme (FSCS) is set to fall in the next financial year.

 

The Financial Conduct Authority (FCA) has launched a joint consultation with the Prudential Regulation Authority (PRA) over the management expenses of the FSCS.

It is proposed that brokers within the home finance intermediation sector will pay £1.19m in 2018/19 towards the FSCS. This is down 13% from £1.36m this year despite total expenses rising by 5%.

General insurance and, life and pension intermediation are set to increase their funding by around 22%.

The changes come after it was proposed that mortgage brokers’ contribution to FSCS compensation is set to be frozen in 2018/19, despite home finance claims this year costing £5m more than expected.

The deficit is not large enough to prompt an increase in the levy, the FSCS recently said in an outlook update for 2018.

The consultation on FSCS management expenses is open until February 16, with the final FCA levy set to be confirmed in the coming weeks.

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