To encourage consumers to decide whether or not to act about PPI before the deadline, the city regulator will run a two-year consumer campaign launching in August this year.

Andrew Bailey, the chief executive of the FCA, said putting a deadline in place and running a campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than putting it off to another day

“We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint,” Bailey said.

“We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”

Responding to the imposition of a deadline, Vickie Sheriff, director of campaigns and communications at Which? said: “It’s been clear for years that the banks should be working much harder to resolve PPI claims fairly. The current process has been wholly inadequate and driven too many consumers to use claims management companies.

“Now the regulator has confirmed a deadline for the victims of this mis-selling scandal to make a claim, it must ensure that banks are doing much more to help customers get back the money they are owed.”

While consumes have until 29 August 2019 at the latest to make their complaint, the FCA said some, including those who have previously been told by their firm that they may have been mis-sold, may run out of time sooner.

Meanwhile complaints regarding PPI policies sold after 29 August 2017 will not subject to the new deadline.