On 25 May 2023, the Financial Services Compensation Scheme (FSCS) published its latest Outlook update, containing revised compensation and levy forecasts for 2023/24.

The FSCS has revised its levy forecast for 2023/24 to £270m. Whilst this is a reduction from the initial estimates the FSCS shared in November 2022, it still expects to pay £471m in compensation during 2023/24 – the sixth year in a row that compensation costs are close to or above £500m.

The 2023/24 forecast levy has reduced mainly due to:

  1. Lower compensation costs in 2022/23, allowing an additional surplus to be carried over into 2023/24. This has reduced the amount of money the FSCS needs to raise to cover compensation costs in 2023/24.
  2. An overall decrease in the compensation forecast for 2023/24.

The FSCS plans to continue closely monitoring the volume and complexity of claims throughout the year and will share its next update on the levy in the autumn edition of its Outlook publication.