Back to All Members' Briefings

FOS Plans and Budget Proposal 2026/27

Friday 9 January 2026

FOS Plans and Budget Proposal 2026/27 Member Briefing

The Financial Ombudsman Service (FOS) has released a consultation on its plan and budget for 2026/2027. This consultation proposes the FOS’s fees and costings for the upcoming financial year. The final budget is yet to be announced and is subject to feedback from the consultation.

ABCUL will be responding to the consultation and ensuring members’ views are represented to the FOS. Please get in touch with the Advocacy team if you have any questions or feedback on the consultation, which can be fed into our finalised response.

Key Budget Proposals

  • The FOS proposes to increase its case fee by 4%, from £650 to £680 – an inflation-led increase
  • It has been proposed to increase the case fee for professional representatives from £250 to £260, with credit if the case is found in favour of the complainant increasing from £175 to £180.
  • The FOS also proposes to increase its compulsory jurisdiction levy from £70m to £86m – this will still be £24m lower than 2023/24.

In the consultation, the FOS sets out that it expects a decrease in case volumes by a third (100,900 year-on-year reduction in cases). The FOS expects there to be a total demand of 188,000 complaints in 2026/27; however, this may change due to new products coming into the FOS jurisdiction, such as deferred payment credit (Buy-Now Pay-Later). ABCUL welcomes the regulation of deferred payment credit to ensure safeguards are in place for consumers, and more vulnerable consumers.

The FOS will therefore budget to resolve 245,000 complaints in 2026/27.

The FOS has forecasted that for non-motor Finance Commission cases the percentage of cases resolved within 3 months is expected to rise and the volume of open cases is expected to decrease.

Professional Represented cases received

Recent changes in the Financial Ombudsman Service’s approach to professionally represented cases have resulted in a sharp decline in their volume. In 2024/25, there were 152,800 such cases; this fell to 42,000 in the latest 2025/26 budget forecast and is projected to drop further to 12,900 in 2026/27.

Total FOS costs

  • Total costs for 2026/27 are projected to be £260m which is £13m lower than latest forecast for 2025/26 of £273m

The consultation closes on 21 January 2026. We value your insights and encourage you to share any feedback with us. Our advocacy team is here to support you and answer any questions you may have. Please don’t hesitate to reach out to advocacy@abcul.org.

Relevant Consultation Questions include:

Demand

  • Do you agree with the FOS forecast for complaint numbers in 2026/27?
  • Are there any other trends or issues the FOS should expect? How might they affect complaint numbers?
  • Do you agree with the estimate for complaints from professional representatives?

Service Standards

  • Will the proposed service standards help customers? Where should the FOS improve?
  • How can the FOS share insights better to stop complaints and unfairness before they happen?

Costs

  • Do you agree with the plan to deliver the Modernising Redress reforms?
  • Are the costs reasonable to meet service standards, reduce backlog, and make necessary changes?

Funding

  • Do you support the FOS’s proposals to:
    • Increase the case fee and compulsory levy for firms?
    • Increase the case fee for professional representatives?
    • Keep the voluntary levy the same?
  • Do you agree with the 2026/27 budget?
  • Do you think the FOS provide value for money? If not, how can the FOS improve?
  • Do you agree to keep the current definition of ‘relevant business’ in the FEES Rules?

 

We welcome any thoughts and comments on the FOS’s Budget proposal 2026/27. Please don’t hesitate to get in touch with the advocacy team at advocacy@abcul.org