The Financial Services Compensation Scheme has confirmed there will be no levy in 2026/27 for insurance brokers and that insurers will see the levy required drop from £113m last year to £88m this year.

In respect of general insurance distribution, it said: “There will be no levy required for firms in this class as we’re not expecting any new firm failures. Compensation continues to relate mainly to payment protection insurance claims. The 2025/26 class surplus was carried forward and will be sufficient for compensation payments in 2026/27.”

In relation to insurers, it added: “The reduction in the forecast levy is partly driven by a higher opening balance. We anticipate lower costs from historic failures as the scheme continues to progress outstanding claims from legacy insurance estates.

“The 2026/27 forecast includes updated indemnity payment trends on these estates as well as compensation for higher-value serious-injury motor insurance claims expected to be paid as legal processes and medical assessments progress.”