PS18/21: SME access to the Financial Ombudsman Service - near-final rules

Open consultation: CP18/3
Consultation closed
Policy Statement

Following publication of this Policy Statement with near-final rules, we have now published final rules. Our final rules, which are unchanged from our near-final rules, extend access to the Financial Ombudsman Service (‘the ombudsman service’) to more small and medium-sized enterprises (SMEs), as well as larger charities and trusts, and a new category of personal guarantors. Our final rules set out the eligibility criteria that these complainants must meet to be able to refer complaints against financial services firms to the ombudsman service.

Read PS18/21 (PDF)

In January 2018, we published a Consultation Paper (CP18/3) proposing that SMEs with fewer than 50 employees, annual turnover of under £6.5m and an annual balance sheet total of under £5m should be able to access the ombudsman service on the same terms as individual consumers and micro-enterprises (the smallest SMEs). We proposed broadly equivalent eligibility criteria for charities and trusts. Finally, we proposed that personal guarantors of loans to a business they are involved in should also be able to complain to the ombudsman service.

Following consultation, we have made some changes to our approach. We explain these changes in more detail in our Policy Statement, but, in summary, we have:

  • relaxed our proposed eligibility criteria for SMEs so that they would only have to meet the turnover test and one of either the headcount or balance sheet total tests, rather than all three
  • allowed the ombudsman service more time to prepare for the changes and allowed ourselves more time to consider the changes as part of our wider consideration of the ombudsman service’s business plan and budget for 2019-20

The changes to our approach, which we believe are supported by the consultation feedback we received, will mean around 210,000 additional SMEs will have access to the ombudsman service.

Our changes to ombudsman service’s eligibility criteria will come into force on 1 April 2019. 


Making it easier for SMEs to resolve disputes with firms by giving them access to the ombudsman service will help to further our consumer protection objective. At present, many SMEs are likely to struggle to resolve disputes with firms as they do not have the necessary financial management and legal resources. These SMEs may therefore be unable to pursue redress when firms have treated them poorly.

We have also published Consultation Paper CP18/31, which proposes changes to the limit on the amount of compensation the ombudsman service can require firms to pay when it upholds a complaint. Notably, we are proposing that the limit for complaints about acts or omissions by firms after 1 April 2019 (the date we propose the limit comes into force) should be increased from £150,000 to £350,000.

Who this applies to

This Policy Statement will primarily be of interest to:

  • providers of regulated and unregulated financial services to SMEs, charities and trusts, including advisers, credit providers and intermediaries dealing with SMEs
  • people who are self‑employed, own or manage SMEs, charities or trusts, or provide guarantees for finance given to SMEs, charities and trusts
  • those who provide business support to SMEs, charities and trusts, and to organisations that represent businesses and self‑employed individuals.

What you need to do

Firms should note the Handbook changes in the final instrument and adapt their practices accordingly.