FSCS confirms reduced levy of £356m for 2025/26 and £56m of recoveries in 2024/25

The Financial Services Compensation Scheme (FSCS) today publishes its spring Outlook including the latest update on the annual levy for 2025/26.

The total levy payable by firms for the 2025/26 financial year is now £356m, which is £38m lower than the indicative forecast shared in November’s Outlook.

In 2024/25 FSCS successfully recovered more than £56m, which was higher than initially forecast. These recoveries have directly helped to reduce the levy.

FSCS expects to pay £332m in compensation to customers during 2025/26, £36m lower than previously forecast.

The movement between our November forecast and the confirmed levy amount is, in the main, due to lower compensation costs now forecast in the Life Distribution & Investment Intermediation (LDII) class and the level of recoveries made. All other classes have remained broadly in line with predictions.

Martyn Beauchamp, Chief Executive, said: “In 2024/25 we had another strong year of recoveries, recouping more than £56m from the estates of failed firms and relevant third parties. This led to higher opening balances carried forward from 2024/25 in certain classes. These recoveries put money back into the financial services sector and to the customers who use it, helping to build trust and confidence in the sector.

“We have now fully transitioned to our new claims service operating model. We delivered a high volume of customer claim decisions last year while maintaining our strong customer satisfaction and quality scores, and our aim is to continue this combination of deep purpose and high performance through the 2025/26 financial year.”

The next Outlook will be published in the autumn.

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