The total is a sharp fall from the £22m brokers coughed-up in 2018-19 and it includes £1m from lenders as their contribution towards broker fees is introduced for the first time.
According to the regulator’s plan and budget for 2019/20, it is expecting home finance related claims to return to recent normal levels after a spike during an “exceptional” last year for the industry.
Compensation limits will also change within the home finance intermediation class in the coming financial year, rising to £85,000 from £50,000.
These new limits will only apply to claims relating to failures declared in default after 1 April 2019, rather than claims relating to failures declared in default prior to that date.
The FSCS said it will be launching a communications campaign to explain these changes to consumers in the coming months.
£70m provider contribution
Overall, the regulator has increased its levies to £516m in the coming year, up from £468m in the nine-month year of 2018/19.
The change from a nine- to a twelve-month period is the main reason for the increase in the levy from the previous year.
If the 2018/19 levy had been for a twelve-month year, then it would have been £574m – £58m higher than the proposed 2019/20 levy, the FSCS noted.
In total providers across the financial industry will be contributing £70m to the direct costs of FSCS levies for advisers and other intermediaries.
This was introduced after a long campaign by adviser representatives and trade bodies which they hope will just be a “starting point”.
