Plans and budget : Category Press release : Category Consultations and responses : Category
The Financial Ombudsman Service will keep costs lower for businesses and further improve its value for money as it faces continued high demand in the year ahead, according to proposals published today.
We have published our plans for the next financial year including our intention to freeze all case fees and levies for financial firms.
This comes in a time of increasing demand for the service – so far, in 2024/25, we received more than 190,000 cases covering issues that touch on people’s everyday lives including complex fraud and scams, unaffordable lending and car loan agreements.
As a demand-led organisation there is an element of uncertainty around the volume and types of cases it might receive, which is why each year we consult industry and other interested parties through the Plans and Budget. Currently the service is predicting around 240,000 cases in 2025/26.
Despite the increased volumes, charges were significantly reduced in last year’s Plans and Budget, with case fees coming down to £650 for respondent businesses, as well as a reduction to the compulsory and voluntary jurisdiction levies. The proposal is to maintain costings and levies at this level – which, taking into account inflation, represents a saving of £70m to industry compared to pricing in 2023/24.
At the same time we are committed to reducing our cost per case whilst continuing to improve timeliness and maintaining the high quality of its service. According to the Plans and Budget for 2025/26, the expected cost per case will reduce to £1,044 compared to a forecast cost of £1,082 for 2024/25.
These savings are the result of substantial improvements in new technologies, tools and ways of working – with specialist teams introduced, improved analytical capabilities enabling more effective resourcing, and machine learning being used to allocate cases quicker.
Over the past few years this has resulted in a case handling time which has more than halved – from a median of 6.4 months to resolve a case in 2021/22 to 3.1 months in 2023/24. This represents real people and businesses being able to move on from their disputes sooner.
Abby Thomas, Chief Executive and Chief Ombudsman said:
The decisions made by our vital service have this year helped tens of thousands of consumers and businesses resolve disputes in sometimes very difficult and stressful circumstances.
Our dedicated teams of experts have enabled people to receive millions of pounds back in redress. I’m also pleased that, for the second consecutive year, we have been able to offer significant savings to industry.
That doesn’t mean there’s not more to do. I’m keen to continue modernising our service and the framework within which we work – leveraging technology and the expertise of our people to streamline processes while upholding the high standards of service that consumers and businesses rightly expect.
I welcome views from stakeholders on our Plans & Budget proposals for the next year. The financial services industry is going through a huge amount of change, and it’s crucial that the Financial Ombudsman Service continues to evolve with it.”
The 2025/26 Plans and Budget Consultation comes at a time when we and the Financial Conduct Authority (FCA) has launched a joint Call for Input to seek views on how to make the redress system fit for the future and give businesses the stability they need to invest, innovate, and drive sustainable economic growth.
In the next financial year, we have predicted we will resolve around 270,000 cases, made up of both new complaints and older disputes. Budget proposals include plans to increase its resource to ensure that all cases can be progressed and resolved in line with its service standards.
The budget also assumes that we will receive £3 million from professional representatives and Claims Management Companies (CMCs) in the next financial year. Plans to introduce a charge for cases brought to the service by these professional representatives are currently undergoing the relevant regulatory approvals process so full details and a timeline for implementation will be outlined in a Policy Statement published in the new year.
The consultation on our Plans and Budget is open until 29 January 2025.
The Call for Input runs until 30 January 2025.
16 December 2024
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4 December 2024
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27 November 2024
Our newly published data shows that complaints about fraud and scams, current accounts and credit cards are at record highs.
