Its latest Outlook publication confirmed this year's levy would remain at £270m, with no additional demands for the rest of the financial year. However, its forecast levy for 2024/25 is a much higher £415m.
It said the "indicative figure is higher than for 2023/24, primarily due to larger surpluses that were carried over from the 2022/23 financial year which reduced the 2023/24 levy to £270m".
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The body also said it had increased its levy for the next financial year as it expected:
- Investment and pension advice claims, due to firm failures from previous financial years, as well as new firm failures.
- Self-invested personal pension (SIPP) operator failure claims.
- Claims and pay-outs for insurance firm failures that occurred in previous financial years.
It added that estimated compensation costs were comparable between the two financial years.
For 2023/24, total compensation was estimated at £435m and in 2024/25, the FSCS said it expected compensation to total about £457m.
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The FSCS said more than 80% of the total compensation forecast relates to payouts it expected to make in the next financial year for firms that have already defaulted. Under 20% of the compensation forecast relates to firms FSCS expects to fail in the future.
FSCS interim chief executive Martyn Beauchamp said: "I am delighted to have recently joined FSCS and to be providing this important update regarding the current compensation and levy figures. It is an honour to lead such an important and purposeful organisation.
"FSCS directly contributes to trust and stability in our financial services system and makes a genuine difference to consumers' lives. As the current 2023/24 compensation forecast (£435m) remains broadly similar to May's Outlook, we do not expect to raise any additional levies in 2023/24.
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Beauchamp said that although the levy is expected to increase in 2024/25, due to the lower surpluses carried over from the previous financial year, compensation remains "relatively stable", as for the last three years, including the forecast for 2024/25, compensation is between £400m and £460m.
He added: "From a claims perspective, we are seeing recent trends continuing. Most of our compensation continues to be paid out for poor financial advice and for legacy insurance provider failures - both of which include some of the most complex defaults and claims we handle.
"As always, we will keep the industry informed of any changes to our forecasts in a timely fashion. The next Outlook will be published in spring 2024."