HM Treasury released the Financial Services Compensation Scheme’s (FSCS) Annual Report and Accounts for 2024/25 alongside its Class Statements, setting out FSCS’s compensation outturn and how levies collected from regulated firms were allocated across funding classes. Over 1 April 2024 to 31 March 2025, FSCS paid GBP 327m of compensation to 32,634 customers, recovered GBP 56.2m from failed firms and declared 45 firms in default, funded by levies on 38,666 regulated firms. Compensation was driven by the claims service (GBP 176m, including over GBP 110m for unsuitable investment, pension and self-invested personal pension advice and around GBP 60m linked to self-invested personal pension operator failures), general insurance provision (GBP 134m for insurer failures from earlier years, with no new insurance firm failures) and deposits (GBP 17m from three credit union failures). The class statements show an annual levy of GBP 265m and no supplementary levy or retail pool, while the statutory accounts report total levy income of GBP 349m under International Financial Reporting Standards after applying prior-year surpluses; FSCS also passed on more than GBP 3m as additional payments to customers with losses above the GBP 85,000 compensation limit. FSCS highlighted completion of a transition to a new claims service operating model, including appointing PricewaterhouseCoopers as its core claims partner and using a payments portal to enable electronic deposit compensation transfers in a January 2025 credit union failure. The Independent Investigator’s report upheld or partially upheld four referred cases, citing delays and weaknesses in monitoring aged claims and prioritising vulnerable customers, and recommended stronger governance over decision changes on appeal. FSCS said it is developing a new five-year strategy for 2026–31 and preparing for the outcome of a consultation on raising the deposit protection limit from GBP 85,000 to GBP 110,000, while noting that surplus balances are not expected to offset future levies to the same extent.
HM Treasury 2025-07-03
HM Treasury releases Financial Services Compensation Scheme 2024/25 report showing GBP 327m compensation paid and GBP 56.2m recoveries
HM Treasury published the FSCS Annual Report for 2024/25, detailing GBP 327 million in compensation to 32,634 customers and GBP 56.2 million recovered from failed firms. The report highlights a transition to a new claims service model and ongoing development of a five-year strategy for 2026–31. FSCS is also preparing for a consultation outcome on increasing the deposit protection limit from GBP 85,000 to GBP 110,000.