Find out more about the Financial Services Compensation Scheme's (FSCS) supplementary levy.
On 16 January 2020, the FSCS announced[1] that it would be raising a supplementary levy this year
FSCS explained in its December 2019 edition of Outlook[2] it expected to raise an additional levy to fund the increased claims volumes and new failures in the life distribution and investment intermediation class.
The levy will be partly funded by the investment, life insurance and structured deposits provider classes and is shared in proportion to the annual funding limits.[3]
Read more about the categories that fund the life distribution and investment intermediation class in our Handbook (FEES 6 annex 3A[4]).
FSCS is also making a levy repayment of surplus funds to the deposit class.
Read the FSCS letter to levy payers explains the reason for the supplementary levy (PDF)[5]
The levy is based on the same data that was used to calculate the FSCS compensation cost levy as shown on a firm’s 2019/20 annual fee and levies invoice.
Table 1: Distribution of the £50m supplementary levy
|
FSCS class |
FSCS category description |
Tariff base |
Levy share (rounded) |
Estimated levy |
|---|---|---|---|---|
|
CLII-1 |
Life distribution and Investment intermediation |
annual eligible income (AEI) |
£36.4m (72.7%) |
£4.06 per £1,000 of AEI |
|
CLII-2 |
Life insurance provision |
relevant net premium income (RNPI) and eligible liabilities (EL) |
£5.3m (10.6%) |
£37.80 per £1m of RNPI and £1.33 per £1m of EL |
|
CLII-3 |
Investment provision |
annual eligible income (AEI) |
£7.6m (15.2%) |
£0.75 per £1,000 of AEI |
|
CLII-4 |
Structured deposits provision |
structured deposits (SD) |
£0.8m (1.5%) |
£592.24 per £1m of SD |
Table 2: Deposit class £30m repayment
|
FSCS class |
FSCS class description |
Tariff base |
Estimated levy |
|---|---|---|---|
|
SA01 |
Deposit |
Protected Deposits (PD) |
£31.50 per £1m of PD |
Deposit class (SA01) levy is adjusted using the firm’s aggregate risk weight (ARW).
Online fees calculator
The supplementary levies are not included in the online fees calculator[6].
Cancelling firms: Firms that were authorised as at 1 April 2019 and applied to cancel their part IV permission part way through the current fee year and are still authorised are liable for their share of the levy.