On 13 May 2021, the Financial Services Compensation Scheme (FSCS) published its latest Outlook report, which confirms its updated levy forecast for 2021/22.
Based on the latest data available, the FSCS has now revised its levy forecast for 2021/22 to £833m. This reforecast is £206m lower than the indicative levy announced in January. There are two main reasons for this lower forecast:
- Due to the extension of government support schemes, some firms that looked likely to fail this year could now fail in the 2022/23 financial year and beyond.
- In 2020/21, the FSCS saw lower claims volumes relating to recent insurance failures than had been expected. There are also a number of self-invested personal pension operator claims that the FSCS now expects to be paid in 2021/22, rather than in 2020/21. These factors have led to a surplus for the 2020/21 financial year, which has been used to offset the previously forecasted £1.04bn levy.