The UK Financial Conduct Authority (FCA) and the UK Prudential Regulation Authority (PRA) have published a consultation paper proposing the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) for 2025/26. The proposal would set the maximum amount the FSCS can levy on firms for its operating costs at GBP 108.6 million for the period from 1 April 2025 to 31 March 2026. The proposed MELL comprises an FSCS management expenses budget of GBP 103.6 million and an unlevied reserve of GBP 5 million. It is GBP 0.5 million higher in nominal terms than the 2024/25 MELL of GBP 108.1 million, with the regulators noting that the FSCS is absorbing some inflation costs so the MELL is lower in real terms. The consultation closes on 7 February 2025. The FCA will receive responses on behalf of both regulators, after which the FCA plans to issue a Handbook Notice and the PRA to publish a Policy Statement so final rules can be in place for the start of the FSCS financial year on 1 April 2025.
Prudential Regulation Authority 2025-01-10
UK Prudential Regulation Authority and Financial Conduct Authority consult on GBP 108.6 million FSCS management expenses levy limit for 2025/26
The UK Financial Conduct Authority and Prudential Regulation Authority issued a consultation paper on the proposed Financial Services Compensation Scheme Management Expenses Levy Limit for 2025/26, set at GBP 108.6 million. This includes a management expenses budget of GBP 103.6 million and an unlevied reserve of GBP 5 million, reflecting a nominal increase of GBP 0.5 million from the previous year. The regulators note that the FSCS is absorbing some inflation costs, making the levy lower in real terms.