The Financial Services Compensation Scheme has forecast its total levy for 2025/26 at £394m, up from the £265m for the current year. The FSCS said it expected to pay compensation claims totalling £367m in 2025/26. Although this was largely flat with the current year it said surplus balances, which had previously been used to offset costs, were down by £171m in total.

Giving this initial forecast to the market, Martyn Beauchamp, interim chief executive at the FSCS, said: “2025/26 financial year, which is broadly flat compared to 2024/25.
While compensation remains flat, surplus balances have been reduced by £171m in total, which is why the overall levy forecast has increased.”

He added: “Early in the new year we’ll publish our Budget Update. This will provide full details of our expected management expenses for 2025/26, which form part of the overall levy and are jointly consulted on by the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). In May, we’ll update our forecast and confirm the final levy.”