FSCS increases levy for life and pensions sector

However the life and pensions intermediaries sector will pay a levy of £90m – up from a forecast of £80m, which the FSCS says reflects a higher average cost of claims arising from advice about investments in SIPPs.

The levy in 2015/16 totalled £319m, of which life and pensions intermediaries paid 100m.

The FSCS maintains that "most industry sectors will contribute less in 2016/17 than FSCS forecast in January".

In addition to the overall levy, FSCS will recover interest costs – also £337m – from Treasury loans for Bradford and Bingley and Kaupthing Singer & Friedlander during the banking crisis in 2008.

Mark Neale, Chief Executive of FSCS, said:

“The annual levy allows us to compensate customers. That generates consumer confidence and trust in the industry.

“We look forward to the forthcoming review by the Financial Conduct Authority into how FSCS is funded, and will play our part in discussions. I encourage the industry to play a full role in the debate.”