PPI will drive 20% surge in compensation claims
Outlining its predictions for 2014-2015, the scheme said it expects the overall volume of new claims to rise to 34,724 from 28,052 in 2013-14.
It predicts 16,000 new PPI claims during 2014-15, which it said mirrors the experience of the Financial Ombudsman Service and the wider consumer redress industry.
It aims to address 90% PPI of claims within three months of receiving a completed application form.
The FSCS also expects claims against credit unions to rise, based on a number of credit union failures over the 2013-2014 financial year.
It has already seen “a slight increase” in pension claims, including in relation to Self-Invested Personal Pensions (SIPPs), and expects more claims in this area over the next year.
The FSCS, UK’s independent statutory compensation scheme, can pay compensation if a financial firm is unable, or likely to be unable, to pay claims against it.
The scheme covers deposits, insurance policies, insurance brokering, investments, mortgages and mortgage arrangement.
In its plan for 2014/15, it also set out a five year programme to modernise the service and make the claims process more efficient by moving applications entirely online.
It said it currently returns 30% off applications to claimants because of lack of evidence.
Lawrence Churchill, chairman of the FSCS, said: “Our mission is to provide a responsive, well-understood and efficient compensation service for customers of financial services, which raises public confidence in the industry. This mission is central to our Five Year Vision.
People must be confident the money they commit to financial products or services is protected. And we know that confidence underpins financial stability.”