Today, the UK Financial Services Compensation Scheme (FSCS) published its Budget Update which outlines its proposed 2023/24 management expenses.

To ensure its service is fully funded, and it can compensate customers as quickly and efficiently as possible, FSCS forecasts an annual management expenses budget for 2023/24 of £99.8m. The total levy for 2023/24, which includes both the management expenses and estimated compensation payments, remains forecast at £478m as announced in November’s Outlook.

The Financial Conduct Authority and Prudential Regulation Authority will be consulting’ on an overall 2023/24 Management Expenses Levy Limit (MELL) of £109.8m. This includes the proposed FSCS’s management expenses budget of £99.8m and an unlevied reserve of £10m. This contingency fund is only invoiced to firms if necessary, for example in the case of a large number of unexpected claims.

Information regarding FSCS’s latest 2022/23 management expenses was also published today. The forecast for the current year now stands at £89.2m – a £6.3m reduction against the budget announced this time last year.

FSCS also announced that it will not be using the £15m unlevied reserve it proposed in January 2022. Any budget surplus (currently £6.3m) will be used to offset the 2023/24 levy and factored into FSCS’s spring Outlook update which will include the latest levy forecast.