FOS increases budget by over 18%
The Financial Ombudsman Service has today confirmed it will increase its annual budget for the coming year by just over 18.5% to £291.7m.
The Ombudsman will also cut its free case limit for individual firms from 25 to 3 to bring in an extra £11m in income a year.
The FOS says it is entering a post-PPI era and needs the funds to tackle a backlog, improve service and deal with more complex cases.
The Ombudsman says the money will be used to, “invest in change, reduce the time it takes to resolve cases, to become financially sustainable, and to enable us to deliver a better service for customers.”
The FOS has confirmed that the individual case fee outside of the free case limit will remain at £750 but the maximum award per case will rise to £375,000 from April.
In key budget changes:
• The cost of the FOS will rise from £245.7m to £291.7m for 2022/23
• The compulsory jurisdiction levy will go up from £96m to £106m
• The free case limit for individual firms will be cut from 25 to 3 and for group account firms from 50 to 15
• The voluntary jurisdiction levy will be £700,000.
The Financial Ombudsman Service’s plans and budget for 2022/23 were published today (30 March).
The FOS says that 2022/23 will be about investing to make a “step change” in the performance of the Financial Ombudsman Service, implementing its Action Plan and continuing to shorten queues.
In 2022/23, the Financial Ombudsman expects to receive 177,000 complaints and resolve 220,500 complaints.
The make up of cases is changing. At the peak PPI accounted for 80% of casework and is now just 4%. Recent complaints are now generally “more diverse” and cannot benefit from the same economies of scale as PPI complaints did, the FOS said. Case handlers need to be more skilled to handle more complex cases.
Nausicaa Delfas, chief executive and chief Ombudsman, said: “In the last financial year, we took significant steps to put the Financial Ombudsman Service on a better path for the future. We published our Action Plan, together with our Periodic Review, and have been driving down our backlog of cases.
“In the next financial year, we will be investing to make a step change in performance, by developing our technologies and implementing our new operating model. The changes we make will help deliver a better service for all our customers and will allow the organisation to become financially sustainable for the future.”