The Financial Services Compensation Scheme (FSCS) helped more than 108,000 customers across the UK to get their lives and businesses back on track during 2021/22.
FSCS either paid customers compensation or enabled them to transfer to a new financial provider for their investment or insurance policy.
In its Annual Report and Accounts and Class Statements published yesterday (Thursday 7 July 2022), FSCS outlines the vital work it carried out during the past financial year.
Among the highlights in 2021/22:
- FSCS had its most productive operational performance year to date with approximately132,000 claims decisions being made – more than 108,000 of which resulted in either paying customers compensation or helping them transfer to a new investment or insurance policy.
- FSCS’s total compensation costs were £584m.
- For the second year running, FSCS achieved record levels of customer satisfaction by achieving 89 per cent in one month and maintaining an 84 per cent average throughout the year.
- During this financial year, FSCS paid compensation to customers who had experienced losses from 1,614 different firms, 66 of which failed in 2021/22.
- In addition to its usual industry-funded work, FSCS delivered a compensation scheme on behalf of the UK Government, paying out more than £114m to approximately 9,000 London Capital & Finance bondholders within six months.
- FSCS recovered £16m from the estates of failed firms. Approximately £13m was used to offset levies and over £3m was passed on to customers whose claims were above our compensation limits.
- FSCS successfully defended all five judicial review challenges brought against the organisation.
- For 2021/22, FSCS was listed as the 4th most inclusive employer as part of the Inclusive Top 50 UK Employers
Caroline Rainbird, FSCS’s Chief Executive, said: “I am pleased to report that for the second year in a row, we achieved record levels of customer satisfaction. Our customers are at the heart of everything we do and we are continuously striving to improve our customer experience.
“During the past year, we also put significant energy into promotion and prevention. The pensions and investments campaign we started last year has now reached more than 7.4m people, and we recently launched two new channels to help spread awareness of FSCS protection, through Instagram and a Podcast series called: Protect your Money with FSCS. Raising awareness of protection, and our limits, contributes to consumers’ ability to make informed choices about their finances.
“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.”
Caroline added: “The progress we made this year would not have been possible without our people. FSCS continues to be recognised as a great place to work by our people and we have been recognised through a number of external awards, which I am very proud of.
“This year we improved our ranking from 22nd to 4th in the Inclusive Companies list of top 50 UK employers. Our Executive Team is now 75% female, and our Board 67% female, which sadly is a rare position in the industry we are part of.”
“FSCS’s work is critical for helping to provide a trusted compensation service for consumers which helps raise public confidence in the UK’s financial services industry. But ideally, we do not want to see firms failing and people experiencing financial loss and the associated stress.
“We can only solve the underlying issues that negatively impact consumers, and ultimately the industry, via close collaboration sector-wide. In the year ahead, I look forward to working further with our stakeholders and our regulatory partners to continue challenging and addressing the issues that are creating consumer harm.”