Firms see FOS budget nearly double from previous year

The Financial Ombudsman Service has added an additional £3m to its final annual budget for 2013/14 since it consulted in January, bringing the total to £283.6m.

The figure represents a 93 per cent increase on this year’s £147.2m budget.

The FOS published its final plan and budget for 2013/14 last week, following the consultation in January. It initially set its budget at £280.1m, but has now approved a final budget of £283.6m.

The FOS is funded by a combination of case fees, which currently firms have to pay if they have four or more complaints referred to the FOS within a year, and a compulsory levy imposed on all financial services firms.

Most of the cost burden for 2013/14 will fall on the largest firms like banks, which from April will pay a new quarterly group account fee, rather than a standard case fee.

From April, standard case fees for other firms will increase from £500 to £550, and the number of free cases from three to 25.