Levy information

Levy limits

There are limits to the amounts FSCS can levy in a financial year. For compensation payments the limits for each class are:

  • deposits: £1,840m;
  • life and pension: £790m;
  • General insurance: £970m;
  • Investments: £370m;
  • Home finance: £130m

Any costs exceeding these thresholds for each class would trigger the general retail pool and be shared more widely under the "widening circle" of funding set up for the new system. The general retail pool would only be triggered in the event of significant default or series of defaults. The FSCS levy has a maximum annual capacity of about £4.03bn.

The management expenses levy is subject to an annual limit, following consultation with the industry by the FSA.

Levy calculation

The amount levied for compensation payments is the amount of compensation paid plus an estimate of the compensation costs we expect to pay in the 12 months following the levy date, assumed to be 1 July each year, allowing for any retained fund balances. The management expenses levy is subject to an annual limit but is based on our budget requirements for each year.

In general we would expect to levy once a year. However, subject to the limits above, we may make additional levies during the year, if necessary.

Details of our levies

2008/09 levy questions and answers


Payment

FSCS levies are included on a single invoice covering FSA, FOS and FSCS fees, which is sent out by the FSA. The FSA has recently announced the establishment of market arrangements for firms who wish to spread the costs of fees and levies. Details of these arrangements are available from the FSA.