On 11 January 2024, the Financial Services Compensation Scheme (FSCS) published its latest budget update where it provides an update on its management expenses for 2023/24 and proposed expenses for 2024/25. The FSCS has also published a statement from its interim chief executive, Martyn Beauchamp.

In his statement Mr Beauchamp mentions:

  • The FSCS management expenses forecast for 2023/24 now stands at £99.7m. This is approximately £0.2m less than when the FSCS first published the management expenses budget in January 2023. This reduction is due to the FSCS incurring lower claims processing costs than previously anticipated.
  • The FSCS is proposing a management expenses budget of £103.1m for next year. Overall, this is an increase of 3% on the 2023/24 budget. The majority of the FSCS budget covers claims-handling costs.
  • The overall proposed Management Expenses Levy Limit (MELL) is £108.1m, which includes a £5m unlevied reserve on top of the core budget. This reserve, which is £5m less than proposed in January 2023, has now returned to its pre-pandemic level. In the previous three financial years, the reserve was higher due to elevated levels of uncertainty around firm failure.