Mortgage brokers have seen the levy they must pay to the Financial Services Compensation Scheme (FSCS) reduced by 80 per cent.
This morning (January 31) the FSCS announced the home finance intermediary sector would be expected to pay a levy of £5m in the next financial year, a significant fall from the £25m paid by the sector last year.
Last year’s £25m bill was accumulated from £22m in levies and a £3m net contribution to the retail pool.
Of the £5m figure, £1m will be shouldered by providers for the first time - leaving mortgage brokers with a £4m bill.
The Association of Mortgage Intermediaries has attributed the falling levy to be paid by mortgage brokers to the fact they will no longer be paying towards pension and investment claims.
Robert Sinclair, chief executive of the AMI, said: "This has been a two year journey to achieve a fairer outcome for all mortgage brokers and it will have a significant impact on this year’s fees.
"This was a significant win for AMI who were often the only entity arguing for these new and fairer class allocations and for the new 25 per cent provider contributions."
In May last year, following months of consulting, the Financial Conduct Authority published its final rules on FSCS funding which saw the life and pensions and investment intermediation funding classes merged.
As part of the new rules, mortgage advisers were carved out to the general insurance distribution class and product providers were now required to contribute close to 25 per cent of the compensation costs which fall on advisers.
rachel.addison@ft.com
