The UK Financial Services Compensation Scheme (FSCS) today provided an update on the progress of payment of compensation to London Capital & Finance (LCF) bondholders.

The Scheme says it has now paid out just over £56.3 million in compensation to 2,878 LCF bondholders who held 3,815 LCF bonds.

FSCS explains that it is close to having identified and paid all LCF customers who it believes are eligible for FSCS compensation.

The Scheme states:

“We appreciate that LCF customers have been waiting patiently while we continue to review claims on a case by case basis. It has taken longer than we anticipated, as we have continued to identify and analyse more evidence which could result in us protecting more customers. We remain committed to ensuring that each piece of evidence and each claim gets the attention it deserves”.

Those LCF customers who are still waiting for a decision do not need to contact FSCS or take any action at this stage. Once the FSCS review of claims is complete, it will await the outcome of the Judicial Review on LCF before confirming the next steps for those LCF customers who have not received FSCS compensation.

In the Plan and Budget published in January 2021, FSCS has revised the 2020/21 supplementary levy from £92 million to £78 million. This is due to fewer LCF claims being upheld than forecast in November 2020. Taking account of class surpluses that will be used to offset the levy, £44.5 million will be invoiced for the supplementary levy by the Financial Conduct Authority (FCA).

FSCS’s current forecast indicates that the 2021/22 levy will be £1.04 billion, a 48% increase on last year. The LDII and Investment Provision classes are expected to breach their class funding limits for the second year in a row, and therefore the retail pool will be triggered for a total of £252 million.