"This data reflects the importance of having advised protection as part of the holistic financial advice journey. Hopefully, this positive trend continues."
- Roy McLoughlin, board member of the PDG
Quarterly complaints data released by the Financial Ombudsman Service (FOS) shows it processed 68k complaints in Q1 2025 compared to 74.6k in the previous year. The number of financial complaints requiring intervention has fallen to its lowest level in the past twelve months.
For protection products, the FOS received 199 new complaints for Term Assurance policies, which is lower than in Q4 2024, but with a higher uphold rate at 18%. There were 163 new Critical Illness Cover (CIC) complaints during this period.
In terms of Income Protection (IP), there was a dramatic reduction from 198 new complaints in Q4 2024 to fewer than 10 in Q1 2025, with almost identical (20% vs 19%) uphold rates. Private Medical (PMI) or Dental Insurance also saw a major drop, from 466 to 23 new complaints.
There were 66 new complaints about Whole of Life (WOL) non-reviewable policies, but with a significantly higher uphold rate (29%) compared to Q4 2024 (17%). 113 new complaints were received for WOL reviewable policies, with a 43% uphold rate.
“There’s a general trend with complaints where they rise during periods of economic distress, such as high interest rates and stock market falls, and correspondingly drop when these events decline,” Alan Lakey, director at CIExpert, told Protection Reporter.
He said: “The fact that the FOS now charge claims managers per case stops them from throwing everything at it. When complaining is free, without any comebacks or penalty for wasting time, you find complaints are high.”
In April 2025, the FOS announced that professional representatives will be able to refer ten complaints annually free of charge, but subsequent cases will cost £250. They will receive £175 back in credit if the complaint is found in favour of the customer they represent.
If a complaint referred by a professional representative is withdrawn or not upheld, the organisation against whom the complaint was made will pay a reduced case fee of £475 – instead of £650.
The FOS remains free for those escalating complaints directly, as well as families, friends, charities, and voluntary organisations who may be assisting them.
Discussing WOL uphold rates, Alan highlighted that these plans are expensive compared to Term Assurance and tend to be taken out by older customers who may be “less savvy than the average consumer […] they are more likely, for economic reasons, to reconsider and believe that they have been missold.”
On behalf of the Protection Distributors Group (PDG), Roy McLoughlin said this data reflects “the importance of having advised protection as part of the holistic financial advice journey. Hopefully, this positive trend continues.”
In terms of IP products, he added, “Depending on the circumstances, getting the right IP product can be complicated, which is why a full fact find - including the current and future work situation and access to any employee benefits - is crucial. However, ensuring a claim is paid when the time comes is most important, and that begins with the advice process.”
“Following a year of extraordinary demand, we recently announced reforms to modernise the UK’s redress system, making it more agile and responsive and a much better fit for today’s economy.
“We’ll continue to listen to our industry partners so that, working together, we can have a system that’s fit for the future,” concluded James DippleJohnstone, interim chief ombudsman at the FOS.
