A closer look at FSCS’s anticipated £372m payout as detailed in their November 2024 Outlook.
- The expected payout for 2024/25 has increased from £363m to £372m.
- This rise is primarily due to progress in the volume of claims decisions.
- The forecast for the 2024/25 levy remains steady at £265m.
- The initial levy forecast for 2025/26 is set at £394m, with compensation costs predicted to stay stable.
The Financial Services Compensation Scheme (FSCS) has announced an updated expected payout of £372 million for the 2024/25 period, reflecting a slight increase from the £363 million forecasted in May. This adjustment was outlined in the November 2024 Outlook statement, which attributes the revision primarily to advancements in claims decision volumes.
An important aspect of the FSCS’s operation is the levy imposed to fund these compensations. For the 2024/25 financial year, the levy remains unchanged at £265 million, as projected in May 2024. This stability provides a degree of certainty for financial planning and allows the scheme to manage its resources effectively.
Looking ahead, the FSCS has released its first total levy forecast for the 2025/26 period, projecting it to be £394 million. The compensation costs are anticipated to total approximately £367 million for that financial year. According to the FSCS, this estimation is considered ‘broadly flat,’ indicating little change compared to the previous year, which suggests an expectation of consistent patterns in claims and payouts. This approach enables the FSCS to plan strategically for the future while addressing existing claims efficiently.
The FSCS continues to adapt its financial strategies to manage the complexities of compensation claims effectively.
