FSCS chief says reduction reflects PPI claims trend.
The Financial Services Compensation Scheme (FSCS) has announced that the 2104/2015 levy will total £276m in its outlook for 2014/15.
This is lower than the £285m levy paid in 2013/14 and less than the £313m indiciative levy which was forecast in January 2014.
The indicative levy for the insurance intermediation sub-class was £62m, which has been reduced to £38m.
Mark Neale, chief executive of the FSCS, said that the figures published today highlighted “some significant differences between the levies for individual industry sectors and the indicative numbers we published in January”.
He stated that the differences “underline the intrinsic unpredictability of the demands on FSCS”.
Neale continued: “For example, the final levy on insurance intermediaries of £38m will be significantly lower than the £62m indication we gave in January.
“This reflects the fact that, in January, we still expected the volumes of payment protection insurance (PPI) claims to grow. In fact, we have seen a reduction in such claims in recent months, mirroring the experience of the Financial Ombudsman Service.”
He added: “This has led us tentatively to conclude that we may now have passed the peak of PPI claims. We are taking a prudent approach as a result by reducing the levy.
“I should, though, emphasise that this fall could turn out to be no more than a lull rather than the beginning of a downward trend. We will continue to monitor the situation.”
