The Financial Ombudsman Service plans to freeze its fees for 2023/24 at this year’s level due to the economic pressures facing firms.
In a consultation paper published today the complaints body said it planned to use reserves to keep fees down.
The freeze comes despite a predicted rise in investment and pensions complaints, with several thousand more expected.
Key fee plans are:
• Case fees will be held at £750
• Compulsory Jurisdiction levy will remain at £106m
• Voluntary Jurisdiction levy will reduce from £700,000 to £600,000
The body is seeking responses to its consultation paper and fee plans by 31 January.
Newly-appointed chief executive and Chief Ombudsman Abby Thomas says in the consultation paper: “Over recent years, we have generally run a deficit and we need to change our funding model.
“Under our transformation programme, we are making changes which drive cost efficiencies and change our funding model to ensure we recover our costs and are financially sustainable. However, we recognise the cost pressures on businesses and propose to freeze our levy and case fees at the same level as last year, which we hope will be welcomed by industry.”
Ms Thomas said she expected total FOS income to fall from £252m to £240m next year despite resolving a similar number of cases as this financial year.
For the 2023/24 financial year, the FOS also plans “further efficiencies and cost savings” through more efficient case handling. It expect this to generate cost reductions of over £20m.
The fee freeze also comes despite a prediction by the FOS of a substantial rise in complaints about investments and pensions over the next year.
The FOS expects investment and pensions complaints to increase from 14,932 over the past year to 17,300 next year.
The FOS forecasts more complaints about pension transfer advice, scams involving investments and cryptocurrencies, complaints relating to surrender and execution delays, performance complaints and portfolio management complaints.
It says some complaints may be driven by cost of living concerns although it has seen little evidence of this so far. It expects some complaints about the overall impact of market performance because low performance often leads to an increase in investment and pensions complaints.
Overall the FOS expects to receive 183,000 complaints in 2023/24.
The FOS also plans to cut the time limit for case disputes from two years to one year.
Further ahead, the FOS says it expects to eventually make increases to fees in line with inflation.
