The government has published plans to improve the Financial Ombudsman Service’s ability to operate as a swift and impartial complaints body and to align its operations more closely with the Financial Conduct Authority.

In conjunction with the announcement, the FCA has published a consultation, building on those from November 2024 and July 2025, to finalise guidance on good and poor practice and on rule changes for improved efficiency by the Financial Ombudsman and the Financial Services Compensation Scheme.

The government said it was seeking to adapt the “fair and reasonable” test to reflect that firms meeting their obligations under the FCA’s rules would be deemed to have acted fairly. It is also introducing a 10-year time limit on bringing claims and seeking to enhance the ability to identify issues with market-wide implications and to deal with mass redress events.

Sarah Pritchard, deputy chief executive at the FCA, said: “We want a system that delivers fair compensation fast, while providing greater certainty to businesses so they have the confidence to invest, grow and compete. We’re acting at pace to change what we can within our current powers, ahead of the government’s wider reforms.”

James Dipple-Johnstone, interim chief ombudsman at the FOS, added: “The financial sector has changed significantly since the Financial Ombudsman was set up 25 years ago, which is why we are driving forward changes to transform the redress system. We are laying the foundations for an agile, responsive and modern service which is fit for the future and has the confidence of consumers and firms alike.”