Regulators scrap £10k compensation cap for failures but say payments will be "modest"

The FCA, the Prudential Regulation Authority (PRA) and the Bank of England have finalised a revised scheme for those who have complaints about the regulators.

The regulators have confirmed that they will consider making a discretionary payment in recognition of financial loss if they have "made a clear and significant error, and they are the sole or primary cause of that financial loss".

In response to feedback, the regulators have removed the proposal that no compensatory payment relating to a financial loss will exceed £10,000, save in exceptional circumstances.

The regulators have increased the levels of discretionary compensatory payments for non-financial loss and say the changes "balance the statutory immunity of the regulators provided by Parliament against the need to make compensatory payments when at fault".

However, the regulators admitted that "in practice it is expected payments made under the Scheme will continue to be modest".

The new scheme will apply from 1st November 2023 and complaints made prior to this date will be considered under the existing scheme.