RegulationDec 8 2015

Fos to freeze case fees

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Fos to freeze case fees

Today (8 December) the Financial Ombudsman Service has published its proposed plans and budget for the next financial year for public consultation.

Based on current trends, Fos expects to receive around 15,000 new complaints about investments and pensions this year.

This is around 2 per cent higher than the Fos had assumed in its budget for 2015 to 2016.

However, despite this increase in complaints Fos stated they plan to freeze the standard case fee for the fourth year running, maintain the current group-account fee arrangements, and to keep the number of “free” cases at 25.

The standard case fee is £550 for 2016 to 2017.

The ombudsman also plans to keep the PPI supplementary case fee at zero.

Taking all this into account, Fos plans for an operating income budget of £223.2m for 2016 to 2017, broadly in line with the 2015 to 2016 budget and slightly less than its latest forecast of £227.2m.

The Fos said the complaints it has received about pensions regularly involve people who feel the investment they bought did not match the description they were given.

Additionally, it added that recent changes in April 2015 giving people greater choice about what to do with their pensions have so far resulted in a relatively small number of enquiries and complaints reaching the ombudsman.

It said that many of these complaints relate to delays and administrative issues on the part of pension providers – or problems people are having accessing financial advice.

In terms of overall case volumes, the Fos said although the volume of new complaints declined in 2014 to 2015, this year it expects numbers to stabilise around the current level.

The Fos added that based on current trends, it expects its general casework - complaints that aren’t about PPI or packaged accounts - to reach 105,000 cases for the year, which is broadly in line with the 106,000 in its plan.

However, it expects to receive 40,000 complaints about packaged bank accounts this year – a third higher than the 30,000 it had budgeted for.

In 2014 to 2015, the Fos received 205,000 complaints about PPI.

This year, it assumed it would receive 150,000 new PPI complaints, however, it now expects to receive around 180,000 complaints by the year end.

The Fos added that PPI is by far the biggest challenge it has faced.