FSCS has published its half year edition of Outlook, which gives an overview of the levy position.
FSCS acknowledges that 2020 has been a challenging year for the financial services sector. It has adapted well to the challenges and continues to deliver its claims service as usual. A number of factors have, however, been driving up the levy and as a result, FSCS estimates that the Life Distribution and Investment Intermediation class requires £92m of additional funding in the form of a supplementary levy.
In addition, the rising levy has been caused by an increase in firm failings over a number of years, an increase in pension advice claims and additional costs relating to the transfer of cash and assets from investment firms.
The figures announced by FSCS today, are however best estimates and are subject to change, given the high level of uncertainty. Caroline Rainbird, FSCS Chief Executive, commented “It is still too soon to know the full effects of COVID-19 on the industry, but we must all be prepared for a challenging period in 2021.”