Sometimes things will go wrong in the way consumers are treated. When that happens, we want people to be put back in the position they should have been in.
Whenever possible, we want the firms responsible for the harm to be the ones to put things right. This means we need a redress framework that delivers redress at the earliest possible point. Where achievable, consumers should be repaid swiftly by the firm which caused them harm without them having to complain.
If a consumer makes a complaint, the firm should resolve it as effectively as possible to avoid further costs to the consumer, business or the wider industry.
Confidence
Outcome 1: The redress system delivers timely and fair complaint resolution and compensation to consumers
| Metric code | Metric description | Source | Baseline Value | Year 1 values | Year 2 values | Year 3 values | Latest status (year 3 value compared to baseline) |
|---|---|---|---|---|---|---|---|
| IRF2-M01 | Increase in the overall timeliness of firms’ complaint resolution measured by the proportion of complaints closed within 3 days, between 3 days and 8 weeks, and after 8 weeks | FCA data | Complaints closed within 3 days: 48% (2021) | Complaints closed within 3 days: 49% (2022) | Complaints closed within 3 days: 45% (2023) | Complaints closed within 3 days: 44% (2024) | Improved |
Complaints closed after 3 days but within 8 weeks: 42% (2021) | Complaints closed after 3 days but within 8 weeks: 46% (2022) | Complaints closed after 3 days but within 8 weeks: 47% (2023)
| Complaints closed after 3 days but within 8 weeks: 50% (2024) | ||||
Complaints closed after 8 weeks: 9.5% (2021) Baseline has been adjusted to also include 2021 H1 figures to give the total % for 2021 | Complaints closed after 8 weeks: 5.5% (2022) Note- slight sum error due to rounding methodology used (i.e. round numbers 10-90, 1dp <10 & >90) | Complaints closed after 8 weeks: 7.7% (2023) Note- slight sum error due to rounding methodology used (i.e. round numbers 10-90, 1dp <10 & >90)
| Complaints closed after 8 weeks: 6.12% (2024) Note- slight sum error due to rounding methodology used (i.e. round numbers 10-90, 1dp <10 & >90) | ||||
| IRF2-M02 | Increase in complaints upheld by firms, measured by complaints upheld by firms from FCA complaint data | FCA data | 59% (2021) | 60% (2022) | 61% (2023) | 57% (2024) | Little or no change |
| IRF2-M03 | Increase in instances of firms putting things right by themselves | FCA data | We were aiming to improve our data on firms putting things right themselves through our complaints reporting project, however we determined that the data would not be in place by the end of the 3-year strategy. | Not assessed |
Outcome 2: Firms that create redress burden bear the associated cost themselves
| Metric code | Metric description | Source | Baseline Value(s) | Year 1 values | Year 2 values | Year 3 values | Latest status (year 3 value compared to baseline) |
|---|---|---|---|---|---|---|---|
IRF3-M01
This metric uses the same data as topline metric CCO2-M01 | Stabilisation of the redress burden from insolvent firms’ unpaid liabilities through FSCS claims over a multi-year period, with a view to a subsequent reduction | Financial Service Compensation Scheme | 28,007 new claims (2020/21) | 24,709 new claims (2021/22) | 21,067 new claims (2022/23) | 40,568 new claims (2023/24) | Improved |
43,407 payments made (2020/21) | 62,380 payments made (2021/22) | 67,908 payments made (2022/23) | 32,668
| ||||
£584m compensation payments (2020/21) | £584m compensation payments (2021/22) | £403m compensation payments (2022/23) | £423m (2023/24) £327m compensation payments (2024/25) | ||||
| IRF3-M02 | To stabilise the overall FSCS levy bill, with a view to a future reduction, and to minimise calls on the Retail Pool, which represents the cost which industry levy payers need to meet | Financial Services Compensation Scheme | Total Levies firms paid £700m (FY 2020/21) | Total Levies firms paid £717m (FY 2021/22) | Total Levies firms paid £625m (FY 2022/23) | Total levies firms paid £270m (FY 2023/24) Total levies firms paid £265m (FY 2024/25) | Improved |
Outcome 3: Consumers understand the redress system and how to access it
| Metric code | Metric description | Source | Baseline Value(s) | Year 1 values | Year 2 values | Year 3 values | Latest status (year 3 value compared to baseline) |
|---|---|---|---|---|---|---|---|
| IRF4-M01 | Increase in proportion of consumers who are aware they can make a compensation claim for mis-selling of a financial product or service directly, without using a Claims Management Company (CMC) | FCA Financial Lives survey (FLS) | 63% of consumers (2020) | 55% of consumers (2022)
| 58% of consumers (2023 re-contact survey)
| 51% of consumers (2024) Difference between year 3 and baseline value is statistically significant. | Declined |
Fair value
Outcome 4: The Claims Management Companies (CMC) sector delivers fair value
| Metric code | Metric description | Source | Baseline Value(s) | Year 1 values | Year 2 values | Year 3 values | Latest status (year 3 value compared to baseline) |
|---|---|---|---|---|---|---|---|
| IRF1-M01 | An increase in the proportion of consumers who made a claim in the last 3 years and used a CMC for their most recent claim who consider that the service met their expectations | FCA Financial Lives survey (FLS) | 57% of consumers (2022) | Between 25% and 47% of consumers (2023 re-contact survey)
| 54% of consumers Difference between year 3 and baseline value is not statistically significant. | Little or no change | |
| IRF1-M02 | An increase in the proportion of consumers who made a claim in the last 3 years and used a CMC for their most recent claim who consider that the fee they paid was fair | FCA Financial Lives survey (FLS) | 39% of consumers (2022) | Between 17% and 39% of consumers (2023 re-contact survey)
| 38% of consumers (2024) Difference between year 3 and baseline value is not statistically significant. | Little or no change
| |
| IRF1-M04 | Increase over time in CMC-represented Financial Ombudsman Service complaints that are upheld | Financial Ombudsman Service | 34% uphold rate (2021) | 43% uphold rate (2022) | 35% uphold rate (2023) | 30% uphold rate (2024) | Declined |
What the latest metric values tell us
In our 3-year strategy we set out the following outcomes:
- The redress system delivers timely and fair complaint resolution and compensation to consumers.
- Firms that create redress burden bear the associated cost themselves.
- Consumers understand the redress system and how to access it.
- The Claims Management Companies (CMC) sector delivers fair value.
Overall, we made progress against some of the outcomes we targeted, but we have more to do.
We saw improvements in the timeliness of firms’ complaint resolution with 94% of complaints being closed within 8 weeks in 2024 compared with 90% in 2021. However, the proportion of complaints which firms upheld directly has seen little change. But this is heavily influenced by uphold rates against a small number of products.
Our review into root-cause analysis of complaints under the Consumer Duty and publication of good practice helped firms improve how they handle complaints. We saw significant improvement in ensuring the firms that create the redress burden bear the associated cost. The total paid out by the FSCS in compensation has significantly decreased during the strategy period. The levy bill paid by firms reduced from £700m in 2020/21 to £270m in 2023/24. The FSCS has also reported increased recoveries from failed firms in 2024/25.
We supported this trend by encouraging firms to identify harm at an early stage and recently published a guide to help firms identify polluting behaviour. We also introduced asset retention rules for British Steel Pension Scheme adviser firms that were part of the redress scheme we ran. This helped prevent firms failing and passing their redress liabilities onto the FSCS. Our enforcement work against some of these firms also resulted in payments directly to the FSCS, helping to reduce the costs spread across the industry. We continued to focus on making sure the CMC sector delivers fair value following our introduction of caps on the fees CMCs can charge in 2022. We saw a reduction in complaints upheld by the Claims Management Ombudsman, indicating that CMCs are better serving customers. The proportion of consumers who are aware they can make a claim without using a CMC has deteriorated since the end of our PPI campaign when we invested significantly in raising awareness. We will continue to consider exploring ways in which we can improve consumer confidence in the redress system.