The Financial Conduct Authority (FCA) has confirmed that the Financial Ombudsman Service (FOS) has increased the amount of compensation financial services firms can pay to consumers and businesses. After the increase, consumers and businesses will be able to claim up to £355,000.

On March 23, UK time, the FOS official website announced an increase in the compensation ceiling. The FOS has proposed that it will henceforth use the Consumer Price Index (CPI) to measure the current rate of inflation and use this to adjust the annual compensation cap.

According to the announcement, the new compensation amount will be implemented from April 1, 2020. Under the new rules, the maximum compensation for investors will be increased from £150,000 to £355,000. It is worth noting that the object of this increase in compensation has a clear time limit. The details are as follows:

For complaints referred to the FOS on or after 1 April 2020 about a company's actions or omissions occurring on or after 1 April 2019, the compensation cap will be changed to £355,000.

For complaints lodged between 1 April 2019 and 31 March 2020 about a company's actions or omissions on or after 1 April 2019, the cap on compensation will remain at £160,000.

For any complaint submitted to the FOS before 1 April 2019, the cap will remain at £150,000.