Chief Executive's statement - May 2026 Outlook
Welcome to the May 2026 Outlook, which sets out our latest view of how compensation and the FSCS levy are expected to develop over the year ahead. This follows our early forecast published in November 2025.
FSCS contributes to financial stability by giving consumers confidence, continuity and compensation when authorised financial services firms fail. This helps strengthen trust in the financial system and supports the conditions for long-term economic growth. As responsible stewards of the levy, we aim to deliver our role with clarity, discipline and efficiency. Our Outlook forecasts are designed to provide transparency to industry and help firms plan.
Reflections on 2025/26
Over the past year, FSCS fulfilled its statutory responsibilities effectively, paying compensation and pursuing recoveries in a way that enables fair outcomes for customers and efficiency for levy payers. Our customer satisfaction levels remain high, reflecting a strong culture of embedding feedback in the design and delivery of our services.
Our claims service model enables us to consistently provide timely and accurate customer outcomes. In 2025/26, we maintained a productive level of advice claims decisions – close to 12,000 – highlighting our ability to manage demand across a wide range of claim types, with varying levels of complexity. We also responded to three credit union failures, resulting in more than 1,500 deposit payments, demonstrating how we act on our commitment to protect customers’ deposits and savings.
Across insurance, we continued to assist customers when firms failed, including following the failure of Premier Insurance Company Ltd in October 2025. Support for affected customers, including those with large-loss insurance claims, will extend into the coming years. Overall, we managed more than 16,000 insurance payments in the year and launched a digitised insurance payments platform, improving speed, control and customer experience.
During 2025/26, more than £34m was recovered from the estates of failed firms and relevant third parties. Total recoveries over the past three years were £145m, with performance in 2025/26 exceeding the annual average for the previous five years. These outcomes were delivered through disciplined, cost‑effective, and creative recovery activity that helps offset the levy.
Readiness, resilience and confidence
Readiness and resilience remain central to how we operate. Our adaptive operating model enables us to respond effectively across a wide range of scenarios, from high volume, lower-complexity claims to complex cases requiring specialist expertise and judgement.
Our readiness is reinforced through close engagement and dialogue with regulators and our international partners. This facilitates effective horizon-scanning and an informed understanding of emerging risks. Robust funding arrangements sit alongside this, including a recently enhanced revolving credit facility that supports new recapitalisation powers introduced through the Bank Resolution (Recapitalisation) Act 2025. This gives FSCS the ability to respond to failures of significant size, helping to reduce disruption for customers.
Awareness of FSCS protection also underpins consumer confidence, with 76% saying they are likely to save or invest more when FSCS protection is in place. Further, 85% of consumers tell us they are more likely to trust a financial services provider whose product is protected by FSCS*. This ‘confidence dividend’ reinforces financial stability, adds to demand for financial services and strengthens longer term trust in the UK financial system.
Looking ahead to 2026/27
The compensation environment continues to evolve, particularly for advice claims. Over the past year, we have seen higher volumes of lower-value general investment claims, and fewer higher- value pensions and Self-Invested Personal Pension (SIPP) operator claims. There has also been a higher proportion of rejected Section 27 claims where no compensation has been due.
The forecast levy for 2026/27 reflects these factors, together with surpluses carried forward from last year, strong recoveries and our focus on cost- efficiency. As a result, the annual levy is projected at £247m, with compensation payments of £267m anticipated during the year.
We have also set a clear direction for FSCS with the launch of our new five-year strategy for 2026–31. Built around a three- point plan, it sets out how we will build on the robust foundations established since our creation in 2001.
Over the next five years, FSCS will focus on further enhancing our scalable, cost- efficient claims model to continue to provide timely, fair and quality customer outcomes; on embedding an enduring purpose-performance culture; and on being a responsible steward of the levy by effectively managing cost and risk, while continuing to maximise recoveries to offset future levies. These priorities will guide how we deliver for customers and industry in the year ahead and beyond.
Above all, as I look ahead to the coming year, FSCS will stay true to its purpose, supporting financial stability by giving consumers confidence, continuity and compensation when authorised financial services firms fail.
Martyn Beauchamp
Chief Executive
*Base: 1,072 UK adults aged 18+ Source: FSCS/2CV, November 2025
Looking ahead to 2026/27
Reflections on 2025/26
Over the past year, FSCS fulfilled its statutory responsibilities effectively, paying compensation and pursuing recoveries in a way that enables fair outcomes for customers and efficiency for levy payers. Our customer satisfaction levels remain high, reflecting a strong culture of embedding feedback in the design and delivery of our services.
Our claims service model enables us to consistently provide timely and accurate customer outcomes. In 2025/26, we maintained a productive level of advice claims decisions – close to 12,000 – highlighting our ability to manage demand across a wide range of claim types, with varying levels of complexity. We also responded to three credit union failures, resulting in more than 1,500 deposit payments, demonstrating how we act on our commitment to protect customers’ deposits and savings.
Across insurance, we continued to assist customers when firms failed, including following the failure of Premier Insurance Company Ltd in October 2025. Support for affected customers, including those with large-loss insurance claims, will extend into the coming years. Overall, we managed more than 16,000 insurance payments in the year and launched a digitised insurance payments platform, improving speed, control and customer experience.
During 2025/26, more than £34m was recovered from the estates of failed firms and relevant third parties. Total recoveries over the past three years were £145m, with performance in 2025/26 exceeding the annual average for the previous five years. These outcomes were delivered through disciplined, cost‑effective, and creative recovery activity that helps offset the levy.
Readiness, resilience and confidence
Readiness and resilience remain central to how we operate. Our adaptive operating model enables us to respond effectively across a wide range of scenarios, from high volume, lower-complexity claims to complex cases requiring specialist expertise and judgement.
Our readiness is reinforced through close engagement and dialogue with regulators and our international partners. This facilitates effective horizon-scanning and an informed understanding of emerging risks. Robust funding arrangements sit alongside this, including a recently enhanced revolving credit facility that supports new recapitalisation powers introduced through the Bank Resolution (Recapitalisation) Act 2025. This gives FSCS the ability to respond to failures of significant size, helping to reduce disruption for customers.
Awareness of FSCS protection also underpins consumer confidence, with 76% saying they are likely to save or invest more when FSCS protection is in place. Further, 85% of consumers tell us they are more likely to trust a financial services provider whose product is protected by FSCS*. This ‘confidence dividend’ reinforces financial stability, adds to demand for financial services and strengthens longer term trust in the UK financial system.
Looking ahead to 2026/27
The compensation environment continues to evolve, particularly for advice claims. Over the past year, we have seen higher volumes of lower-value general investment claims, and fewer higher- value pensions and Self-Invested Personal Pension (SIPP) operator claims. There has also been a higher proportion of rejected Section 27 claims where no compensation has been due.
The forecast levy for 2026/27 reflects these factors, together with surpluses carried forward from last year, strong recoveries and our focus on cost- efficiency. As a result, the annual levy is projected at £247m, with compensation payments of £267m anticipated during the year.
We have also set a clear direction for FSCS with the launch of our new five-year strategy for 2026–31. Built around a three- point plan, it sets out how we will build on the robust foundations established since our creation in 2001.
Over the next five years, FSCS will focus on further enhancing our scalable, cost- efficient claims model to continue to provide timely, fair and quality customer outcomes; on embedding an enduring purpose-performance culture; and on being a responsible steward of the levy by effectively managing cost and risk, while continuing to maximise recoveries to offset future levies. These priorities will guide how we deliver for customers and industry in the year ahead and beyond.
Above all, as I look ahead to the coming year, FSCS will stay true to its purpose, supporting financial stability by giving consumers confidence, continuity and compensation when authorised financial services firms fail.
Martyn Beauchamp
Chief Executive
*Base: 1,072 UK adults aged 18+ Source: FSCS/2CV, November 2025
Looking ahead to 2026/27