New measures to modernise and transform the UK redress system 

Following feedback from industry and consumer groups, the Financial Ombudsman and FCA have outlined the next steps on their joint work to modernise the redress system. Key changes being proposed include: 

• A new registration stage to ensure that complaints referred to the Financial Ombudsman are within its scope and ready to be investigated before being allocated to a caseworker. 
• New powers to dismiss complaints that are best resolved in other ways, are more appropriate for courts or another dispute resolution process, or where there has been no material financial loss, distress or inconvenience. 
• Adapting the current ‘fair and reasonable’ test the Financial Ombudsman applies when considering a complaint to improve clarity, regulatory alignment. 

The changes come alongside wider government proposals on reforming the Financial Ombudsman, and mark a significant step in the delivery of a strengthened redress system which is transparent, robust, and fair to all parties in today’s evolving financial landscape. 

James Dipple-Johnstone, Interim Chief Ombudsman at the Financial Ombudsman Service, said:  

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. 

Building on improvements we have delivered already these new measures will further modernise our operations to ensure we remain a service which keeps pace with a changing sector in delivering our vital service for consumers and supporting confidence in UK financial services.

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.

Currently, the majority of complaints are resolved by firms, and the redress system works well for individual cases that come to the Financial Ombudsman. But high volumes of complaints on specific or novel issues can jam the system and cause significant delays.  

Together the measures will ensure the Financial Ombudsman Service is able to focus its resources on the cases it was set up to resolve as a quick and informal alternative to the courts and help ensure that outcomes are clearly aligned with regulation. 

The Financial Ombudsman and FCA’s consultation closes on 11 May 2026.