The Financial Conduct Authority (FCA) has approved the Financial Ombudsman Service’s 2020/21 budget.
The Financial Conduct Authority (FCA) has approved the Financial Ombudsman Service’s 2020/21 budget. Read the fees instrument on the FCA handbook website.
The ombudsman service is committed to playing its part in supporting UK consumers and businesses through the Covid-19 (coronavirus) crisis – especially in light of the clear increased potential for financial hardship and vulnerability.
Recognising the unprecedented impact on firms, the service has revised its funding arrangements for the coming year. The revisions represent a combination of targeted interventions to benefit smaller firms, and broader steps to benefit other firms that contribute to its funding.
At the same time, the budget will help the ombudsman to provide the effective service that businesses and their customers are relying on at this extremely challenging time.
In summary, in 2020/21:
- The ombudsman service will maintain the number of “free” cases at 25 for firms outside the group account fee arrangement. This means nine out of ten firms won’t pay any case fees (set at £650). In line with its consultation, the number of “free” cases will be 50 for each group in the group account fee arrangement.
- We’re asking the FCA to freeze all minimum levies at 2019/20 levels.
- The overall income the service takes from its levy will be reduced – with a case fee to levy income split of around 70:30, compared with the 60:40 split it consulted on.
The ombudsman service will absorb the cost of these changes – which amount to £25.4m in total – by reducing its reserves.
The service’s wider plans will be published next week. This will include an explanation of the differences between its final and consultation budgets, as well as a summary of the feedback received to its consultation.
Chief ombudsman & chief executive Caroline Wayman said:
The Covid-19 crisis is unprecedented – and at the moment, it’s simply not possible to anticipate the nature and scale of its consequences for lives and livelihoods.
But it’s already clear that the businesses we cover will have a key part to play in mitigating Covid-19’s worst effects.
In close collaboration with the FCA, we’ve worked hard to ensure we’re playing our part minimising the pressure businesses are facing.
And we’re committed to resolving any complaints that arise – sharing what we’ve seen to prevent the same problems happening again.
It’s also vital that we do all we can to support our own people – including ensuring those who are personally more vulnerable, or who are caring for others, have the flexibility to do what they need to.
We’ll keep in touch with all our stakeholders as the year develops.