Liz Field, Chief Executive of PIMFA, commented: “Current levels of FSCS funding are unsustainable for well-run firms and indicative of a wider issue whereby consumers continue to be let down. We welcome the fact that the FCA has recognised this problem, as well as the role poor regulation has historically played in contributing to that.

“Setting out a set of principles for reform is welcome and we are committed to engaging with this process in order to achieve the best possible outcome for consumers and our members.

“However, it is disappointing that some of FCA’s proposals today amount to a checklist of existing, and in some cases ill-defined initiatives, which have not in most cases contributed to the significant increases we have seen in FSCS claims.

“If the industry does need to put up with a higher levy for a few more years in the hope that eventually things will get better, as this review intimates, we believe that there should have been more ambition shown around alternative sources of funding to bring down the current total cost.

“We have been clear with Government and the Regulator that the use of FCA fines would embody the polluter pays model, which they have previously expressed as an ambition and its absence remains a mystery as others continue to pollute and our members continue to pay.”