Under the current system, the Scheme is only able to predict increased compensation costs over a 12-month period, but as of April 2014 this will increase to 36 months. This rule will apply to all but the deposits class.
The FSCS has recently finished re-calculating an interim levy of £326m imposed on the investment intermediation and fund manager classes. An additional £31.3m is due, with fund managers expected to pay £31m of the total.
Mark Neale, chief executive of FSCS said: “We recognise our levies can hit firms hard. The environment in which we operate is highly unpredictable. The costs of failure can be high. But our over-riding concern is to make sure we have the money to pay claims as they fall due. There is no magic bullet to the funding issue. And there is no perfect system in what is a zero sum game.
“What I can promise is that FSCS will continue to strive under the new system to provide as much certainty or forewarning as possible to firms about the potential costs of compensation. We take our accountability to the industry very seriously.”
The revised funding model will see a £50m increase of the threshold for the investment intermediation class to £150m, and a lowering of the threshold for fund managers to £300m. Consultation on the proposals is open until February 18th.
