PS8/26 – Financial Services Compensation Scheme – Management Expenses Levy Limit (MELL) 2026/27

What Changed

• The final MELL for 2026/27 comprises:
• Management expenses budget: £108 million (£4.4 million increase from 2025/26, broadly in line with inflation)
• Unlevied reserve: £5 million (for unforeseen costs without requiring further consultation)
• Total MELL: £113 million Budget allocation details:
• Investment budget: £5.5 million (10% increase from 2025/26) supporting the FSCS' new five-year strategy launching in 2026/27
• Strategic initiatives: Eight programs including improvements to advice claims handling, depositor and policyholder outcomes, risk management, and cybersecurity operations

Suggested Considerations

• *Immediate compliance actions for affected firms:
• *Budget planning: Incorporate the £113 million MELL into financial forecasting and levy allocation models for the 2026/27 financial year (April 1, 2026 onwards)
• *Levy calculation: Ensure systems are updated to reflect the new budget allocation across PRA and FCA funding classes (detailed in Appendix 4 of CP1/26)
• *Reserve provisioning: Account for the £5 million unlevied reserve in contingency planning, recognizing FSCS may levy additional funds at short notice for unforeseen costs
• *RCF cost allocation: Confirm whether your firm is subject to the expanded RCF cost allocation (particularly relevant for credit unions, which raised concerns during consultation)
• *Accounting treatment: Update financial statements and regulatory reporting to reflect the new levy obligations effective April 1, 2026

Key Dates

Who is Affected