Operating costs at the Financial Ombudsman Service are set to jump £30m next year.
The complaints adjudicator has proposed a budget for the 2017/18 financial year of £295m, up from £265m this year.
The FOS forecasts it will spend £9m less than its £265m budget for 2016/17, however.
The budget increase comes primarily from contractor staff costs, which were budgeted at £40m for 2016/17, rising to £70m in 2017/18.
Provision for “contingencies” is being increased from £7.6m to £10m, while overall staff costs are ticking down from a budgeted £167.9m to £165.5m.
Chief ombudsman Caroline Wayman, chief ombudsman says: “Like last year, we’re planning for the next financial cycle at a time of ongoing uncertainty in the area with the most significant bearing on our work. As ever, we remain focused on giving quick and fair answers to individual problems, while ensuring we’re in a position to respond effectively to future demand for our help.”
The FOS will look to freeze the case fee for businesses – which only applies after their 25th case – at £550. It is hoping to generate an extra £20 in income through its group fees account which covers the eight largest businesses responsible for the most complaints.
The FOS is expecting a similar level of investment and pensions complaints to last year with 13,000 due to be handled by the service.
The consultation on next year’s business plan reads: “In response to our consultation last year, some of our stakeholders said they thought we might see an increase in complaints about pensions. We explained in ombudsman news in June 2016 that, although around a quarter of a million people had used their “pension freedoms” by that point, we’d received very few complaints. This position hasn’t changed. And it’s now been confirmed that the planned secondary market for annuities – which some stakeholders thought might have resulted in complaints to us – won’t be going ahead.”
Payment protection insurance is again set to dominate the FOS workload, with 250,000 new complaints anticipated.