On 13 January 2026, the Financial Conduct Authority and Prudential Regulation Authority issued a joint consultation paper (PRA CP1/26, FCA CP26/2) setting out the proposal for the Management Expenses Levy Limit (MELL) for the Financial Services Compensation Scheme (FSCS) for 2026/27. The MELL covers the FSCS’ costs of operating the UK’s statutory compensation scheme.

In the consultation paper it is proposed that MELL be set at £113 million for 2026/27, consisting of a management expenses budget of £108 million and an unlevied reserve of £5 million. The budget of £108 million represents an increase of £4.4 million from 2025/26, which is broadly in line with inflation. Excluding the cost of a new enhancement to the FSCS’ revolving credit facility, the proposal represents a nominal £6.6 million reduction on a like-for-like basis to the 2025/26 budget and a £11 million real terms reduction. The proposed MELL would apply from 1 April 2026, the start of the FSCS’ financial year, to 31 March 2027.

The deadline for comments on the consultation paper is 10 February 2026.