UK PRA and FCA finalise the FSCS MELL for 2026/27

The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) have published policy statements (PS26/4/PS8/26), finalising the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) for 2026/27 following the January consultation. The regulators largely maintain the approach as consulted on, setting the MELL at GBP113 million. This comprises a GBP108m management expenses budget to cover the FSCS' ongoing operating costs and a GBP5m unlevied reserve, allowing the FSCS to meet unforeseen expenses without the need for further consultation.

In the January consultation, it was reported that the FSCS projected its management expenses to be GBP103.6m for the current financial year, in line with its budget. The FSCS has since revised its forecast and now expects a GBP2.5m underspend from the 2025/26 budget. Where actual expenses are lower than the budget when reconciled at year end, these funds will be used to offset the levy for the relevant classes in 2026/27. The MELL will apply from 1 April until 31 March 2027.

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