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FSCS levy revised down to £833m

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  • 13/05/2021
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FSCS levy revised down to £833m
The Financial Services Compensation Scheme (FSCS) has reduced its levy forecast down to £833m from £1.04bn.

 

It said lower claims volumes for insurance failures and the expectation that a number of self-invested personal pension (SIPP) claims would be paid in 2021/22 not 2020/21 had resulted in a surplus for the 2020/21 financial year. 

It also said because government schemes had been extended, the firms which were expected to fail this year would likely fail in 2022/23 and beyond instead. 

Mortgage intermediaries will be expected to contribute £12m in the updated forecast, down from the £22m stated in January. 

Caroline Rainbird, chief executive of FSCS, said: As we begin a new financial year and lockdown eases, there still remains a great deal of uncertainty in the financial services industry. While the pandemic remains difficult to assess, we are doing all we can to prepare for failures, handle claims and protect consumers. 

“We are going through an incredibly uncertain period and therefore the levy may have to be revised again later in the year.” 

Rainbird said the figure included a £116m retail pool levy which other Financial Conduct Authority (FCA) classes are expected to contribute to if they do not reach their own maximum levy limit or where another classes exceeds its limit. 

She added: “In order not to raise a higher levy than we need to, we will keep the industry updated and invoice the £116m levy to fund the retail pool at a later point in the year when the amounts required are more certain.  

“Firms will be given 30 days’ notice before we invoice the retail pool levy.” 

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