FSCS supplementary levy to hit brokers

December 2020


Following the complex failure of London Capital & Finance, an increase in pension advice claims and other exceptional costs, the FSCS estimates the Life Distribution & Investment Intermediation (LDII) class requires £92m of additional funding in the form of a supplementary levy. This amount is more than the annual maximum that FSCS can raise from this class. Therefore, FSCS will source £8m from the LDII class and £33m from surpluses across other classes. It will then call for an additional £51m mainly from the retail pool (of which £29m would come from the GI distribution class). The retail pool is a separate pot that all classes are required to contribute to, and is only used when one class exceeds its annual levy limit. Any additional levies are expected to be confirmed in January 2021 and invoices will be issued to firms shortly afterwards.

 

 


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