FSCS confirms unchanged levy this year and signals early forecast for 2026/27
The Financial Services Compensation Scheme (FSCS) today published its latest Outlook levy update for 2025/26. It also provides an early view of its forecasts for 2026/27.
FSCS confirms the 2025/26 levy remains unchanged at £356m as forecast in May 2025. As a result, no additional levy is expected for firms for the remainder of the current financial year.
Maximising cost-effective recoveries remains a key priority for FSCS and progress in this area continues steadily. Recoveries help to reduce the levy charged to firms, and this year FSCS expects to recover nearly £40m from failed firms and relevant third parties.
To support the financial services industry in its planning for the year ahead, FSCS is also publishing an initial view of the 2026/27 levy.
FSCS anticipates the total levy for 2026/27 to be broadly in line with this financial year, dropping slightly to £342m. This initial forecast is driven by an anticipated reduction in compensation costs compared to 2025/26, primarily driven by fewer claims involving self-invested personal pension operators.
Additionally, some funding classes are expected to begin the period with lower opening balances, as surpluses carried over from previous years have been effectively utilised. This brings the forecasted levy for these classes in closer alignment with projected compensation costs.
Martyn Beauchamp, FSCS Chief Executive, said: “As a responsible steward of the levy, we remain focused on reducing costs to firms wherever possible while delivering the best outcomes for our customers. That’s why we proactively pursue recoveries, and now expect to recover almost £40m by year-end, £5m more than forecast in May. Our recoveries help to offset the levy for firms and ensure those most responsible for financial harm are held to account.
“FSCS plays a crucial role in maintaining confidence and trust in financial services, which are essential for a stable and growing economy. That confidence relies on our readiness to respond quickly when firms fail. To deliver on this, we’re simplifying our processes to speed up claims and payments for our customers. We’re also enhancing our insurance claims systems to ensure people can continue accessing the products and services they depend on with minimal disruption.
“2025/26 is a pivotal year as we shape our next five-year strategy. Our priority remains staying future-fit and ready to deliver for customers and industry alike.”
Media enquiries
Farah Baldock
Email - publicrelations@fscs.org.uk
Tel - 07730 668 558