The Scheme received more than 53,000 new claims in 2014/15 - almost identical to the number received the year before. However, the makeup of claims was significantly different year-on-year. FSCS has seen a marked increase in new general insurance provision claims– 21,900 during the year compared with 14,328 received in 2013/14.
Claims against intermediaries advising on investments and on life and pensions business are also growing in both cost and complexity. The average compensation payment for SIPPs-related claims against independent financial advisers went up by nearly 50% to £16,375. That compares with last year’s average payment of £11,104. As a result of these claims, the Scheme raised an interim levy of £20m in March 2015. It expects SIPP-related claims to continue to rise in 2015/16.
FSCS Chief Executive, Mark Neale, said:
“During the year, as well as paying out £327m in compensation, to over 24,000 claimants we handled over 142,000 enquiries covering all aspects of our work.
“Our priority is to deliver a service that puts consumers first. That is why we have worked hard to modernise our service by overhauling our handling of claims, through the delivery of Connect, to give people more choice in the way they deal with us. Connect will establish the foundations for our operations for years to come and improve the efficiency of claims handling. It will enable FSCS to respond rapidly to future business failures. That is at the heart of building consumer confidence.”
The Scheme also continued to maximise recoveries to reduce costs for levy payers. FSCS recovered funds totalling £560m from the estates of failed firms, including £494m from the major banking failures of 2008/09.
Mark Neale added:
“Pursuing recoveries is a vital way in which we deliver savings to the industry. Our strategy and interventions are producing highly positive results to the benefit of taxpayers and levy payers alike.”
