The Financial Ombudsman Service will address significant demand and improve the efficiency of its case resolution processes, according to plans for the year ahead published today.
In 2025/26, the organisation, which provides an impartial dispute resolution service and is free for consumers, expects to resolve 270,000 cases – representing a 20% increase compared to the previous year.
This commitment comes despite recent surges in complaints, most notably the influx of cases related to motor finance commission. These account for nearly half of the Financial Ombudsman’s current stock of around 190,000 cases and cannot be resolved due to ongoing legal and regulatory action.
Exceptional demand strains resources and underlines the need for reform around mass redress events. Collaborating closely with HM Treasury and the Financial Conduct Authority (FCA), the Financial Ombudsman is embarking on a transformative journey to modernise both its service and the wider redress system. The aim is clear – to ensure the service can continue to resolve cases impartially and with minimal formality, and to prevent financial issues from escalating into widespread disputes, thereby reducing uncertainty for firms and enhancing outcomes for consumers.
Jenny Simmonds, Interim CEO at the Financial Ombudsman Service, said:
“We never forget that behind each case are customers waiting for an answer. As we respond to the huge levels of demand we saw last year, we are continuing to drive forward our plans to transform and improve our service.
“We are increasing our capacity to resolve cases productively, building flexibility into our workforce to respond to reasonable changes in demand.”
The organisation is also taking steps to modernise its processes to ensure businesses and consumers benefit from a faster, more effective dispute resolution service. This includes improving case-handling efficiency, increasing workforce flexibility, and enhancing the use of digital tools to streamline processes.
The Financial Ombudsman is also committed to providing firms with better insight into complaint trends, helping them address the root causes of disputes and reducing the likelihood of cases escalating. By working collaboratively with industry, the service aims to promote early resolution and improve confidence in the redress system.
Despite the demand the Financial Ombudsman Service has faced, it has today confirmed that it will maintain the significantly lower costs for respondent businesses which it introduced last year. Case fees will remain frozen at £650, and the reduced compulsory and voluntary jurisdiction levies will be maintained.
The organisation has also taken steps to make its fee model fairer as new charges for professional representatives came into force on 1 April 2025. The move also aims to encourage professional representatives to submit better-evidenced complaints, considering their merits more diligently before referring them.
James Dipple-Johnstone, Interim Chief Ombudsman at the Financial Ombudsman Service, said:
“Our decision to maintain current case fee levels and levies for businesses represents a saving of nearly £70m to industry compared to pricing in 2023/24.
“We will continue to share our insight with businesses to help them to better understand why complaints occur so they can resolve them earlier or stop them occurring in the future.”
The new financial year has also seen the FCA confirm that the maximum amount the Financial Ombudsman can require a business to pay when it upholds a complaint is increasing. The limits are set by the FCA and are adjusted each year to keep pace with inflation, as measured by the Consumer Prices Index (CPI). For complaints referred to the Financial Ombudsman from 1 April 2025, the award limit will increase to £445,000 for complaints about acts or omissions that occurred on or after 1 April 2019.
The free dispute resolution service anticipates receiving 209,000 complaints throughout the year across a range of financial issues, including bank accounts, credit cards and insurance. This is a slight increase compared to complaint levels seen in 2022/23 and 2023/24, but a significant drop on the 330,000 cases it predicts it will have received over 2024/25 due to the impact of motor finance commission complaints. Full data for this period will be published in the summer.
The Financial Ombudsman Service remains focused on delivering fair and timely dispute resolution. By improving efficiency, sharing insight with businesses, and modernising the system, the organisation aims to provide a balanced and effective redress framework that benefits both consumers and industry alike.
