PIMFA calls for FSCS review following interim levy announcement

Trade association PIMFA has called for an urgent review of the Financial Services Compensation Scheme (FSCS) following yet another announcement of an interim levy that the industry will be expected to fund.

The levy, which is £69m, is in part due to higher than expected pension transfer claims. The FSCS had already announced that its actual costs had increased by almost £70m, increasing to £407m from its forecast of £336m.

The association has expressed its concern that the reason for these claims is not being tackled. It that it is not clear if the FSCS follows through on getting money it pays out back from PI providers, who covered the firms who ceased to trade, which caused claims to be referred to the FSCS.

PIMFA highlighted that this is creating an untenable position for firms, resulting in them not being able to effectively plan and budget for their future.

Commenting, PIMFA CEO Liz Field said: “Unexpected levy increases of this magnitude cannot be part of a long term sustainable funding option for the FSCS.

“Member firms need to be able to plan their own finances and be confident that the relevant regulator is taking pro-active steps to address the root causes of increased FSCS claims not just the symptoms. We know the levy is complicated, but the industry needs to work with FSCS on a model that works for firms.

“Our Member firms fund the FSCS through their levy and should reasonably have confidence that the burden of costs from claims settled by the FSCS, whether they relate to defaulting firms or unsuitable advice, are recouped from the PI with the funds recouped used to reduce the financial burden increasing FSCS levies place on member firms. We need this situation clarified.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.