FSCS Budget Update 2026
Welcome to our latest FSCS Budget Update.
You can read the full report below and also see our Chief Executive, Martyn Beauchamp’s statement for more on our plans for the year ahead.
The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are consulting on our proposed 2026/27 management expenses as part of their annual Management Expenses Levy Limit (MELL) consultation. The consultation closes on Tuesday 10 February 2026.
Latest management expenses forecast for 2025/26 is within budget
We expect to end this financial year within the original budget of £103.6m, with a slight reduction due to savings made across claims processing and resourcing.
Proposed budget for 2026/27
A budget of £108m is proposed to ensure we can carry out our statutory functions including:- paying compensation to eligible customers;
- making recoveries to help reduce levies for firms; and
- providing funds to the Bank of England to recapitalise deposit takers if required.
- £97m in in core management expenses; and
- an additional £11m for an enhanced revolving credit facility (RCF), enabling greater funding readiness and recapitalisation capacity.
The total levy for 2026/27, which includes both the budget and estimated compensation payments, remains at £342m as forecast in last November’s Outlook.
Total MELL and unlevied reserve
The PRA and FCA are consulting on a total MELL of £113m for 2026/27 which includes:- A proposed budget of £108m.
- An unlevied reserve of £5m.
The unlevied reserve ensures we can raise additional funds, if needed, to process a significant increase in claims for any unexpected firm failures. Firms are only invoiced for this if necessary.
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