FSCS does U-turn on broker levy


The Financial Services Compensation Scheme has done a U-turn on its proposed levy for brokers for the coming year.

The £10m figure for home finance intermediaries, including mortgage brokers, was provisionally set out in January, although now it has revealed the levy will be just £6m. The levy was £5m in 2015/16.

The total 2016/17 FSCS levy on all financial firms will be £337m, down from a predicted £363m earlier this year but up 2015/16 where it was £319m.

The FSCS says the drop is due to lower forecast claims costs for the 2015/16 year.

FSCS managing expenses are budgeted for £67.4m in 2016/17 and the scheme will recover £337m of interest costs relating to Treasury loans to Bradford and Bingley and Kaupthing Singer & Friedlander made during the banking crisis in 2008.

FSCS chief executive Mark Neale says: “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.”