In January, the FSCS estimated this levy would be £57m. However, it was announced on Tuesday that life and pension intermediaries will now be expected to pay £100m in 2015-16, a significant increase when compared to last year’s levy of £33m.
The compensation scheme said the increase is due to a rise in claims related to self-invested personal pensions (SIPPs).
The overall levy stands at £319m, which is an increase of £32m compared to January’s estimate.
However, the 2015-16 levy for investment advisers has dipped compared to the forecast, now standing at £116m for the year, against the £125m estimate. The FSCS said this is due to the reduction in the costs relating to investment defaults and the expected increase in recovery for the coming year.
The decline of PPI claims is good news for general insurance advisers who will no longer have to contribute to the levy.
“Even higher”
Chief executive Mark Neale said the fluctuations in the levy demonstrates the unpredictability of the number and types of claims to the FSCS.
“It is still early days in terms of volume and value of claims coming to us so it is possible that the costs during the year might be even higher,” he said.
“That means that we cannot rule out, at this stage, the possibility of the costs exceeding the maximum amount we can levy on life and pension intermediaries in any one year. That could lead to a levy on all firms in the retail pool.”
