On 12 January 2023, the Financial Services Compensation Scheme (FSCS) published its budget update which outlines its proposed 2023/24 management expenses. This includes the FSCS’ day-to-day running costs, as well as costs associated with processing claims.
To ensure its services are fully funded, and it can compensate customers as quickly and efficiently as possible, the FSCS forecasts an annual management expenses budget for 2023/24 of £99.8m. The total levy for 2023/24, which includes both the management expenses and estimated compensation payments, remains forecast at £478m.
The FCA and PRA will be consulting on an overall 2023/24 Management Expenses Levy Limit (MELL) of £109.8m.
Furthermore, information regarding the FSCS’s latest 2022/23 management expenses was also published, the forecast for the current year now stands at £89.2m – a £6.3m reduction against the budget announced this time last year. The FSCS also announced that it will not be using the £15m unveiled reserve it proposed in January 2022. Any budget surplus (currently £6.3m) will be used to offset the 2023/24 levy and factored into the FSCS’s Spring Outlook update which will include the latest levy forecast.