The Financial Services Compensation Scheme (FSCS) will levy firms £363m this year, £15m less than it forecasted in its budget in January, however investment advisers will pay £4m more, the service has said.
The cuts came after the service downgraded its forecasted compensation costs from pension-related products such as self-invested personal pensions (SIPP), which were reduced from an initial forecast of £163m to £146m. General insurance costs were also down.
SIPPs account for about 93% of the costs in this class and saw their forecasted average claim value reduced from £36,000 to £32,000. A supplementary levy on the sector also helped reduce costs for the last year by about £9m.
Despite this, the levy on life and pensions advisers will remain as forecasted at £100m to account for the recent increase in the volume of SIPP-related claims, the FSCS said.
It said it would keep the sector under review and raise a supplementary levy later in the year to cover any extra costs if needed.
Meanwhile, investment intermediaries will pay £4m more than the January forecast, amounting to a total of £88m. The service said it continued to see claims in the sector relating to a range of different claims and wanted to allow for future unexpected failures and costs.
The FSCS said the final levy for 2017/18 was broadly in line with the indicative forecast published in January and included management expenses of £69.2m. It was up 7% on the levy in 2016/17, which totaled £337m.
Chief executive Mark Neale said: "Although the indicative forecasts we published in January and our final levy numbers this year are broadly similar, firms know that our levies can be unpredictable owing to the nature of some failures and the claims they generate.
"We welcome the continued support of levypayers at this time. We know that many are also engaged in the ongoing FCA review of the FSCS funding model, and encourage a full debate to settle the basis of FSCS funding for the foreseeable future"
The regulator is currently reviewing the way the FSCS is funded, and is eyeing to increase the amount it collects in contributions from providers.
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