CP26/2: Financial Services Compensation Scheme – Management Expenses Levy Limit 2026/27

Read CP26/2[1]

Why we are consulting

The FCA and PRA are required to set a limit on the total management expenses that the FSCS can levy financial services firms. The MELL covers the FSCS’s ongoing operating costs and includes the FSCS’s IT, staff, legal and outsourced and internal claims’ handling costs. It does not include compensation costs, which are levied separately and decided by the FSCS.

Who this is for

• FCA authorised firms
• PRA authorised firms  

Next steps

This consultation closes on 10 February 2026.

Please send any comments on the proposed MELL by email, or alternatively in writing to: David Lamb, Prudential Regulation Authority, 20 Moorgate, London, EC2R 6DA.

The PRA is accepting responses on behalf of both the FCA and the PRA. Any responses will be considered by both authorities and shared anonymously with the FSCS.

Following consideration of the responses, the PRA proposes to issue a policy statement (PS) and the FCA proposes to issue a Handbook Notice so that the final rules can be in place for the start of the FSCS’s financial year on Wednesday 1 April 2026.

Background 

The proposed MELL covers the FSCS’s costs of operating the UK’s statutory compensation scheme.

Setting the right MELL makes sure the FSCS has enough funding to carry out its functions. 

The proposed MELL would apply from 1 April 2026 until 31 March 2027.

For more detail on how the MELL is calculated and the FSCS unlevied reserve, read chapter 2 of the CP and the FSCS January 2026 budget update[2].