FSCS welcomes funding consultation

25th July 2012

The Financial Services Compensation Scheme (FSCS) welcomes the consultation on its funding which the FSA announced today. It gives financial services firms the opportunity to influence the shape of the future funding of the compensation scheme.

FSCS is calling on the industry to get involved in the review. This is essential to ensuring that any new funding system commands the widest possible support and understanding.

FSCS Chief Executive, Mark Neale, says: “We welcome the debate about our future funding model. FSCS plays a critical role in protecting consumers when firms go bust. It helps to promote consumer confidence and needs a sustainable funding model to pay people compensation. Its development requires wide industry engagement.

“So this consultation is hugely important. We recognise the current funding arrangements are a concern for some firms. And although the industry welcomes the important role FSCS plays, many do not support our current funding arrangements. That makes it critically important for firms to really engage with the consultation. Give your views on how to develop a sustainable funding model for FSCS.”

FSCS had paid out more than £26bn to more than 4.5m consumers since it was set up in 2001.

The FSA will make the final decision on the new FSCS funding system.

Jargon Buster

  • FSA

    Financial Services Authority, was previously the UK's regulator for the finance industry. It was replaced by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) on 1 April 2013.