What do the levies cover?
The FSCS levy for its running costs, specific management expenses relating to processing claims, and compensation payments. FSCS estimates that, in 2007/08, the total current indicative levy will be in the region of £104m, inclusive of management expenses. The actual amounts allocated to contribution groups will depend not only on the number, but also on the nature and value of the claims received. Previous levies are available on the FSCS website.
The FSCS levy for its operational costs (general operational costs referred to as base costs levy and specific management expenses relating to processing claims referred to as specific costs levy) and compensation payments (compensation costs levy). The early estimated indicative total levy for 2008/09 was £130.8m. This figure includes an estimated amount of £100.1m, which will be applied to the clean break exercise being undertaken due to the new funding system, leaving an estimated amount of net new money to be raised of £30.7m across the industry, inclusive of management expenses and compensation costs. The actual amounts allocated to classes / sub-classes will depend not only on the number, but also on the nature and value of the claims received. The FSCS announced the following in a press release on 10 April 2008: “The Financial Services Compensation Scheme (FSCS) has set its levy for 2008/09 at £131.7m. The industry will pay an initial net levy of £28.3m in new money for 2008/09
