FSCS spring forecast sets levy at £247m for 2026/27
The Financial Services Compensation Scheme (FSCS) today publishes its spring Outlook including the latest update on the annual levy for 2026/27.
The total levy payable by firms for the 2026/27 financial year is £247m.
In 2025/26 we recovered £34m from the estates of failed firms and relevant third parties, with performance in 2025/26 exceeding the annual average for the previous five years. These recoveries help offset the levy paid by financial services firms.
FSCS expects to pay £267m in compensation to customers during 2026/27. This is £27m lower than the early forecast set out in our November 2025 Outlook.
The 2026/27 levy forecast also reflects higher surpluses carried forward from the previous year. This was driven in part by:
- A shift towards higher volumes of lower-value advice claims, alongside fewer higher-value pensions and SIPP operator claims;
- A higher proportion of Section 27 claims where no compensation has been due;
- Credit union failures remaining steady, however with fewer affected members resulting in lower-than-expected compensation costs; and
- Lower insurance costs from historic failures.
Taken together, these factors, alongside strong recoveries and continued cost-efficiency, have contributed to the levy now expected to be £95m lower than our November forecast.
Martyn Beauchamp, Chief Executive, said:
“Over the past year, we delivered our statutory responsibilities efficiently, paying compensation and pursuing recoveries in a way that supports timely and fair outcomes for customers, while delivering value for levy payers.
“In 2025/26, we made close to 12,000 advice claims decisions, supported customers when three credit unions were declared in default, responded to one new insurance firm going out of business, and continued to support those customers impacted by earlier failures. Total recoveries in the past three years alone were £145m, delivered through disciplined, cost-effective recovery expertise that helps offset the levy.
“Alongside this strong performance, we set a clear direction for the future with the launch of our new five‑year Strategy. It sets out how we will build a more scalable and cost‑efficient claims service, strengthen our purpose‑driven culture and act as a responsible steward of the levy, ensuring FSCS continues to deliver for customers and industry in the years ahead.”
The next Outlook will be published in the autumn.