The Financial Services Compensation Scheme is forecasting a levy for 2021/22 of £1.04bn, up £339m from the £700m raised the previous year due mainly to soaring numbers of claims.
The FSCS expects continuing failures in the SIPP sector and says the cost of compensating victims of the collapsed mini-bond firm London Capital & Finance is much higher than expected.
The FSCS said in its Annual Plan and Budget out today: “We expect further failures of self-invested personal pension (SIPP) operators. Claims in relation to SIPP operators are forecast to account for £336m of the Investment Provision’s anticipated £345m compensation costs. The compensation cost for this class is a significant (89%) increase on 2020/21, mainly due to expectations that firms in this sector may fail.”
Because of rising claims the FSCS will go ahead with a supplementary levy of £78m to be invoiced in February although the FSCS said this was