The Financial Ombudsman Service has frozen its levy for the 2022/23 financial year, saying it recognises the pressures on businesses.
The Fos’s compulsory jurisdiction levy (CJ) will be maintained at £106mn, and the voluntary jurisdiction levy (VJ) will be reduced from £700,000 to £600,000.
Case fees will also be flat, at £750.
In a consultation on plans and budget released today (December 16), the Fos’s chief executive, Abby Thomas, said: “We recognise the cost pressures on businesses and propose to freeze our levy and case fees at the same level as last year, which we hope will be welcomed.”
The ombudsman’s total income is expected to reduce from £252mn in 2021/22 to £240mn in 2022/23, resolving a similar number of cases.
The Fos also expects its cost base (excluding restructuring costs) to be lower than previously forecast, projected at £231mn in 2023/24, compared to £238mn forecast in 2022/23.
At the end of the year, the ombudsman expects its income to be £13mn higher than set out in the forecast, driven by a number of reasons.
These include £5mn of income recovered from firms that had gone into administration which was debt that the Fos had previously written off, receiving more complaints above each company’s three free cases than it expected.
It also made £3mn as a result of higher interest rates on money it held, and had a lower number of complaints than it had budgeted for from firms in the group account fee arrangement.
The Fos expects to see a rise in complaints, from 155,000 forecast in 2022/23 to 183,000.
Many of these will be about investments and pensions, with 3,300 more complaints expected over BSPS transfer advice and cryptocurrency scams, as well as the overall impact of market performance, with the Fos saying that low performance often leads to an increase in investment and pensions complaints.
Banking and credit complaints are expected to rise by 25,000, due to a rise in disputed transaction complaints and an increase in the volume and sophistication of fraud and scams.
It is also anticipating a rise in irresponsible and unaffordable lending complaints driven by the impact of rising interest rates and the impact on mortgages.
In June, the Fos proposed changes to its compulsory jurisdiction and voluntary jurisdiction levies, as well as its case fee structure.
As part of the consultation, it is proposing to charge a fixed fee for all VJ participants instead which it anticipates will be no more expensive than the current arrangement.