The UK Financial Services Compensation Scheme (FSCS) has outlined the distribution of levies for the 2019/20 financial year.
Overall, there are 46,000 firms that pay the tariff every year.
The Scheme said that, based on its calculations, the majority of levy-paying firms (59%) will contribute less than £50 for 2019/20.
Some 4,500 firms will not need to pay at all, and will instead receive an average rebate of £139.
But the top 110 firms will carry most of the burden.
The FSCS said that those companies – which make up 0.2% of levy payers – will contribute on average £3m ($3.7m, €3.3m) each, almost 61% of the total bill.
Recoveries should give room to breathe
“We do not take for granted the impact of our levy, as we recognise it can be a significant and unwelcome expense for many firms,” said Caroline Rainbird, chief executive of the FSCS.
“The levy enables FSCS to protect thousands of people each year who have nowhere else to turn when financial service firms fail.
“To reduce costs to levy payers we pursue recoveries from the estates of failed firms, and in 2018/19 we recovered £26m.”
The Scheme revealed in March 2019 that it had recovered £300m from failed firms over the previous five years.
The levy for financial advisers for 2019/20 was set at £175m, a £45m increase from 2018/19 because of the rising number of complaints against advisers performing pension transfers into Sipps.
All firms that are regulated by the Financial Conduct Authority and the Prudential Regulation Authority are required to pay levies to the FSCS, according to their funding class.
The money is used by the FSCS for management expenses and compensation costs.
