The FCA has published its Consultation Paper, CP25/7, with its 2025/26 fees and levies proposals, which include the proposed levels of fees and levies, amending the FEES manual to align with the Money Laundering Regulations, and some minor amendments to certain sections to improve readability, remove obsolete definitions and update references. The FCA is also seeking industry views on whether it should change its draft rates modelling approach. Firms can respond by 13th May 2025 by using the online response form. The FCA’s Fees calculator has been updated with the 2025/26 Consultation rates.
The Consultation includes the usual reminder of the ‘November through to July’ annual fees policy cycle. The confirmed Annual Funding Requirement (the AFR – what the FCA expects that it will cost to run itself during the financial year) is £783.5m, comprising the baseline ‘ongoing regulatory activities’ (ORA) costs and exceptional projects.
Fees are increasing almost across the board (which need to be considered in the context of the number of firms in each fee block reducing in almost every case), with increases being:
- General insurance mediation – £0.8m (2.2%) from £38m to £38.8m
- Principal firms – £0.2m (3%) from £7.1m to £7.3
- Consumer credit firms – 2.3%
- Claims management firms – 3.1%
- Funeral plan intermediaries and providers – 0.9%
- In line with the ongoing phased increase in minimum fees for consumer credit firms, the minimum fees payable will range (dependent on consumer credit-related income) from £800 to £1,100 for Limited Permission firms, and from £1,500 to £2,000 for ‘full’ permission firms.
The FCA is proposing to raise application fees in line with the 2.5% increase in the ORA budget and round them to the nearest £10 (see the Consultation, Appendix 1, for details of the new fees in FEES 3 Annex 1A).
The proposed FOS levy tariff rate for general insurance mediation will drop from £0.531 per £1000 of relevant business annual income to £0.436 per £1000 of relevant business annual income.
There are proposals in relation to skilled persons review fees arising out of activity related to the Money Laundering Regulations, and there are proposed minor amendments to the FEES Sourcebook to correct an error, improve readability, remove obsolete definitions and update references.
The FCA is planning to introduce a new fee block, CC4, for those variable fee-paying lenders that sold a Discretionary Commission Agreement (DCA) between 2007 and 2021, to cover the costs incurred from the FCA’s review of historical motor finance DCAs.