Advisers to be levied £240m again as FSCS announces £1bn overall levy

'Cannot normalise this level of loss'

Sophie King
clock • 2 min read

Financial advisers can expect a significant regulatory levy bill once again for the next financial year as the Financial Services Compensation Scheme (FSCS) has predicted an overall levy forecast of £1bn for the first time.

In its budget for 2021/22, the FSCS has predicted a bill of £361m for financial advisers' funding class - also known as the life distribution and investment intermediation class (LDII) - to pay for the compensation scheme. However, funding classes are capped at £240m, so the excess beyond that figure will be applied to other types of firms.  The FSCS said an ongoing rise in complex pension advice claims was the main cause: it said almost three-quarters (71%) of those costs were estimated to be in respect of advice claims, where the FSCS expects the recent trend of processing more complex...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Regulation

FCA consults on increased fees amid AI plans

FCA consults on increased fees amid AI plans

Regulator proposes to raise minimum and flat fees by 1%

Sophia Panayi
clock 26 March 2026 • 3 min read
FCA looks to drop annual suitability review requirement for ongoing advice services

FCA looks to drop annual suitability review requirement for ongoing advice services

Regulator pushes for ‘periodic’ assessments instead

Isabel Baxter
clock 25 March 2026 • 2 min read
FCA considers trail commission future as it consults on simplified advice

FCA considers trail commission future as it consults on simplified advice

Follows targeted support work

Jen Frost
clock 25 March 2026 • 2 min read