FSCS Budget Update January 2024

Welcome to our latest FSCS Budget Update where we provide an update on our management expenses for 2023/24 and proposed expenses for 2024/25.

You can read the full FSCS Budget Update January 2024 report below.

You can also read our Interim Chief Executive, Martyn Beauchamp’s statement, to find out more about our plans for the year ahead.

Alongside this information, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are consulting on our proposed 2024/25 budget as part of their annual Management Expenses Levy Limit (MELL) consultation. The consultation closes on Monday 12 February, 2024.

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The latest management expenses forecast for 2023/24 is £99.7m

We expect to end this financial year approximately £0.2m below the management expenses budget approved by the FCA and PRA.

The proposed management expenses budget for 2024/25 is £103.1m

We exist to protect consumers if an authorised financial services firm they have been doing business with fails. To ensure we can carry out our statutory functions, including paying compensation to eligible customers, we are proposing a 2024/25 management expenses budget of £103.1m. This represents a 3% increase on the budget for 2023/24, and we are making business-wide efficiencies to keep the overall increase below inflation. 

The total levy for 2024/25, which includes both the management expenses and estimated compensation payments, remains as forecast in last November's Outlook.

We propose an unlevied reserve of £5m

The FCA and the PRA are consulting on an overall MELL of £108.1m for 2024/25. It includes the proposed budget of £103.1m and an unlevied reserve of £5m. The reserve, which is £5m less than proposed in January 2023, has now returned to pre-pandemic levels. This 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. 

Full FSCS Budget Update report

If you would like the FSCS Budget Update in an alternative format, please contact us.

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