As well as an increase to the Financial Services Compensation Scheme limit for investors (to bring it in line with cash deposits), the Financial Ombudsman Service is also increasing its award limit from the same date.
Last December, we brought you news that the Financial Services Compensation Scheme (FSCS) would increase the level of compensation available to investors in regulated investment funds to £85,000 from 1 April 2019 - to bring it in line with the compensation level for cash savings deposits.
>> Investor compensation limits to increase
The FSCS is a body which provides important protection to consumers, paying compensation when regulated providers of financial services products have gone out of business.
In addition to this improvement, it has now been confirmed that the Financial Ombudsman Service (FOS) will also be revising its award limit from 1 April 2019.
The FOS was set up by Parliament to resolve complaints between financial businesses and their customers, if they cannot resolve the complaint themselves.
The current award limit of £150,000 will increase to £350,000 for complaints about acts or omissions by firms which take place on or after 1 April 2019. For complaints about acts or omissions which took place before 1 April 2019 and which are referred to the FOS on or after 1 April 2019, the award limit will increase to £160,000.
The hope is that with the maximum award limit increasing by more than double, companies will devote more time and resources to complaints handling, to try and avoid the need for the FOS to become involved.
From 1 April 2019 onwards, both of the above award limits will be automatically adjusted each year in line with inflation, using the Consumer Prices Index (CPI) for the preceding January.
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