Published on July 7th, the Financial Services Compensation Scheme’s Annual Report states that total compensation costs amounted to £584m in 2021/2022, providing redress to 108,000 people, with approximately 132,000 claim decisions made in total and pay outs concerning 1,614 different firms.
While the FSCS achieved record levels of customer satisfaction, Caroline Rainbird, FSCS’s Chief Executive, said; “It is worth noting that the compensation we paid to customers during the past financial year does not represent the full amount of financial harm being experienced. There were £214m in losses that we could not compensate customers for, due to our limit, which is currently £85,000 for most claims.
“We also cannot compensate for the emotional loss associated with financial harm which can be devastating. Preventing this harm from occurring in the first place remains the best way to address this issue and improve outcomes for consumers.”
Jamie Patton, Managing Director at Johnson Law Group concurs: “I believe that £584M in compensation is arguably £584M too much. This tells us that the FCA’s role in policy regarding financial organisations is still falling short.
“Whilst the FSCS paid out these sums to 108,000 customers who had been let down and lost money, these figures do not tell us how many of those suffered losses greater than the £85,000 damages cap that is applied to its compensation payments.”