On 26 May 2022, the Financial Services Compensation Scheme (FSCS) published its May 2022 Outlook, focusing on the 2022/23 levy forecast.
The FSCS reports that whilst the headline levy number has decreased since its first forecast in November (now forecast at £625m), the amount of compensation it expects to pay customers during 2022/23 is still greater than the total it paid last year. In relation to compensation funding, the FSCS draws attention to compensation funding in relation to pensions. It states that the scale of financial loss experienced by many consumers in this area highlights the impact that the current compensation limit has on the FSCS’ ability to put people on track, leaving many with pension shortfalls.
The FSCS also reports that it is creating a new insight and data hub for its teams to use which will help it highlight issues and opportunities to the industry, regulators and others. It will also help the FSCS expose poor behaviour and pinpoint the root causes of harm so that effective solutions can be proposed. Data also helps the FSCS will its recoveries work.