How we are funded
FSCS is funded by levies on firms authorised by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). FSCS's costs are made up of compensation costs and management expenses.
FSCS’s current funding model, applicable from 1 April 2019, was consulted on in the FCA’s consultation papers CP17/36 (PDF 3.25MB) and CP18/11 (PDF 1.30MB). For funding compensation costs, the FSCS levy is split into eight funding classes:
- Life and pensions provision.
- General insurance provision.
- General insurance distribution.
- Investment intermediation*.
- Home finance intermediation.
- Investment provision.
- Debt management.
*The old life and pension and investment intermediation classes were merged from 1 April 2019.
A firm’s regulatory permissions determine the funding classes it is required to contribute to.
The contribution of each firm within a class is calculated using the tariff base applicable to the relevant funding class. For example, the tariff base for the deposits class is based on the amount of covered deposits held by the firm.