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FSCS cuts 2014/15 levy by £37m - but ups bill for wealth managers

FSCS cuts 2014/15 levy by £37m - but ups bill for wealth managers

The Financial Services Compensation Scheme has reduced the 2014/15 annual levy by £37 million – except for private client managers and financial advisers, who will see their bill for the year rise.

Announcing the change from its earlier estimate, the FSCS said it was able to reduce the headline amount due to lower claims volume as payment protection insurance mis-selling claims peaked.

The only exception to the rule was investment intermediaries and home finance intermediaries, who will have to stump up £112 million for the year – a £7 million increase on earlier estimates.

‘Compared to earlier estimates, the levy bills for most industry sectors fall,’ the FSCS said in a statement. ‘And fund managers will receive a rebate from FSCS as a result of successful recoveries by the scheme relating to the failure of Keydata.

‘Lower claims volumes are helping to contain the costs to firms in the coming year. In particular, FSCS now tentatively believes that PPI claims may have peaked last year and be set on a downward trend.

‘This reduction in claims means a much lower bill for insurance intermediaries. However, the volume of claims seems fluid and unpredictable, so FSCS is taking a cautious approach and reducing the levy as a prudent precaution.

The FSCS had originally estimated a £313 million levy across the financial services industry for the year. Following the revision that has now fallen to £276 million.

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