In its November 2025 edition of Outlook the FSCS shares an update on compensation figures for this financial year, as well as an early view of the levy forecast for 2026/27.
Progress in 2025
- The FSCS has completed the transition of its claims service, bringing the majority of claims management and all customer call-handling in-house. This shift is focused on enhancing customer experience and boosting productivity. It’s also helping build internal expertise across the wide range of claims it handles.
- These changes are already delivering results, e.g., time spent chasing third parties for critical data needed to calculate potential losses for customers has been halved.
- Knowing FSCS can act fast when a financial firm fails gives people the confidence to invest in financial products and services. This is why the FSCS is investing in being prepared, streamlining claims handling, speeding up deposit pay-outs through digital payments, and upgrading its insurance claims systems.
- 2025/26 is a pivotal year for FSCS as it shapes the next five-year strategy. Its priority remains staying future-fit, ready to deliver for customers and industry alike.
Latest forecasts for 2025/26
- The 2025/26 levy remains as forecast in May 2025 at £356m and additional levies for firms are not anticipated.
- The FSCS expects to pay slightly less in compensation over the year than anticipated in May, a decrease of 5% to £315m (from £332m). This is mainly due to a change in the types of claims it expects to pay out for customers.
- Maximising recoveries is also a critical part of its role and efforts in this area continue to gain momentum, with close to £40m anticipated by the end of 2025/26.
An initial look at 2026/27
- The FSCS early forecast of the total levy in 2026/27 is £342m, which represents a small decrease on 2025/26. This is based on a forecast of £294m in compensation costs for 2026/27.
- These early expectations for 2026/27 reflect the changing claims environment. Lower compensation costs are currently forecast in the Investment Provision class, mainly driven by fewer claims against SIPP operators. A higher opening balance in this class is also anticipated as the FSCS carries forward surpluses from 2025/26.
- In early 2026 the FSCS will publish an update to its Budget. This will provide full details of management expenses for 2026/27. This forms part of the overall levy and is jointly consulted on by the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). The FSCS May 2026 Outlook will provide an update to the forecasts and confirm the levy for 2026/27.