On 21 May 2020, the Financial Services Compensation Scheme (FSCS) confirmed its levy for 2020/21. The levy is £649m this year, £14m more than was forecast in its Plan and Budget 2020/21 that was published in mid-January. This includes an amount of £74.7m for management expenses which are the costs of running the FSCS.
The main change in the compensation forecast since the indicative levy was announced in the Plan and Budget, is the inclusion of £44m to cover estimated compensation costs for London Capital and Finance. This will be attributed to the Life Distribution and Investment Intermediation Class. However, savings in other classes (mainly Deposits and General Insurance Distribution) mean that the overall increase from the January indicative levy is £14m.
A full explanation of the 2020/21 annual levy is contained in the latest edition of Outlook, the newsletter FSCS produces for the industry.