Pensions - Articles - FSCS levy forecast for 2024 to 2025

PIMFA has welcomed the news that the Financial Services Compensation Scheme (FSCS) levy will remain unchanged for the remainder of this financial year (2023/24) and the first forecasts for the levy for the next financial year (2024/25).

 Simon Harrington, Head of Public Affairs at PIMFA comments: "We welcome today’s news that no additional levies will be raised for the Financial Services Compensation Scheme (FSCS) for the remainder of this financial year (2023/24). While the existence of the FSCS and the protection it provides remains a fundamental part of the financial services landscape, it remains the case that the cost of funding it represents a significant financial burden and barrier to growth for firms in this sector. More broadly, while the levy forecast for 2024/25 is lower than in previous years, indicating lower levels of consumers who have been let down, it remains the case that it is an uncontrolled cost to firms and penalises well-run firms for the failures of others.
 "While we recognise that this represents a stabilisation of the cost of funding the FSCS, we remain of the view – given the likelihood of future claims working their way through the system – that FCA fines to be used to subsidise the FSCS levy, rather than being directed towards the Exchequer would represent a much fairer system and truly represent a polluter pays model the entire financial services industry agrees on. This is the fairest way to ensure consumers get the protection that they need whilst lifting a considerable burden on firms."

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