FCF sets levy for 24/25

We’ve confirmed that the Fraud Compensation Fund (FCF) levy for 24/25 will be set at the same level as it was for the previous year.   

We’ve set the 2024/25 levy at: 

• £0.65 per member for Master Trusts  
• £1.80 per member for other eligible occupational pension schemes  

Progress to date

We charge a levy so that we can provide compensation for schemes that have lost funds due to dishonesty.  The compensation we provide is vital for members who would otherwise suffer significant losses to their pension savings. 

Between 2005 (when the FCF took over from the Pension Compensation Board) to 2020 we paid out £5m on 16 schemes. However, following a court ruling in November 2020, which clarified that occupational pension schemes set up as part of a scam were eligible for FCF compensation, the value of claims has significantly increased.  To fund the costs of compensation DWP legislated to provide the FCF with a Government loan and to increase the value of the levy that could be raised. 

We’re scrutinizing the claims very carefully as we work through them, to make sure they’re eligible and all reasonable recoveries have been made.  Since November 2020, we have paid out £49.7m in compensation to 28 schemes.  We expect to receive at least a further 99 claims with a potential value of £416.4m. 

FCF and PPF levy and reserves

It’s previously been suggested that the PPF should fund the FCF, in light of its assets and reserve. PPF funds are entirely separate from the FCF funds, and relate to the protection the PPF provides to people with a defined benefit pension when their employer becomes insolvent. There can be no lawful transfer of funds between the PPF and the FCF. 

Next steps 

The Pensions Regulator will collect the levy on our behalf, together with other fees and levies that all pension schemes must pay.