“More broadly, while the levy forecast for 2024-25 is lower than in previous years, indicating lower levels of consumers who have been let down, it remains the case that it is an uncontrolled cost to firms and penalises well-run firms for the failures of others,” he said.
"While we recognise that this represents a stabilisation of the cost of funding the FSCS, we remain of the view – given the likelihood of future claims working their way through the system – that FCA fines to be used to subsidise the FSCS levy, rather than being directed towards the Exchequer would represent a much fairer system and truly represent a polluter pays model the entire financial services industry agrees on.
“This is the fairest way to ensure consumers get the protection that they need whilst lifting a considerable burden on firms."
On a more positive note, Ormston said the FSCS existed to provide consumers with a “great deal of confidence when doing business with relevant firms and organisations”.
“Consumers are aware of the FSCS and will often ask about whether products are covered by them,” he said.
“It is impressive how they have made it into the public consciousness more than others may be.”
amy.austin@ft.com
