FSCS pays out £125m in compensation for unsuitable advice in 2025/26

The Financial Services Compensation Scheme (FSCS) paid out more than £125m in compensation to customers who received unsuitable investment, pension, and self-invested personal pension (SIPP) advice in 2025/26, its Annual Report and Accounts has revealed.

Overall, the financial compensation scheme paid out £267m across its deposits, insurance, advice and investment services to 14,113 customers.

A total of £34.4m was recovered from the estates of failed firms and relevant third parties over the year, bringing its three-year total to £145m in recovered funds.

Almost 12,000 advice and investment claims were resolved in 2025/26, which the FSCS said reflected its commitment to efficient claims processing.

The report also set out the FSCS’s response to regulatory developments, including the increase in the deposit protection limit to £120,000 from December 2025.

The FSCS outlined its new five-year strategy in March, focusing around three priorities: building a scalable, cost‑efficient customer claims model; embedding a purpose and performance-led culture; and being a responsible steward of the levy.

“When firms fail, confidence matters,” said FSCS chief executive, Martyn Beauchamp.

“FSCS provides that confidence by helping people receive compensation as quickly as possible and maintain access to essential financial services.

“Eighty-five per cent of people who know about FSCS say it increases their trust in the financial system. That trust helps people make informed decisions about saving and investing.

"Over the past year we delivered for customers when they needed us most, supporting those affected by firm failures, implementing the increased protection limit for savers and pursuing recoveries that help reduce costs for levy payers.

“Our new strategy builds on that momentum, setting a clear direction for the future. It strengthens our readiness and resilience and helps us make better use of data and technology.

“Working closely with regulators and industry, it ensures we continue to support financial stability by giving consumers confidence, continuity and compensation when firms fail.”

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