FOS award limit of GBP 445,000 from April 2024: the PI claim impact

The Financial Ombudsman Service (FOS) maximum award limit was increased on 1 April 2024 to GBP 445,000 for complaints about acts or omissions on or after 1 April 2019, with separate limits for earlier acts and omissions. The limit is set by the FCA in DISP 3.7 of the Handbook and is updated annually in line with CPI from 1 April each year. The limit applies to compensatory awards; interest and costs are payable in addition.

What the limit covers

The FOS limit is the maximum a firm can be required to pay where it accepts the FOS final decision, or where the consumer accepts it. The award is binding on the firm but the consumer can refuse to accept it, in which case the consumer retains their right to bring civil proceedings. The £445,000 cap therefore reflects the FOS regime, not the underlying civil liability. A claim worth £900,000 in damages may produce a £445,000 FOS award and a separate civil exposure for the balance.

How the limit has moved

• Up to 31 March 2019, the limit was £150,000.
• From 1 April 2019, it was £350,000 for acts or omissions from that date.
• From 1 April 2024, it is £445,000 for acts or omissions from 1 April 2019.

The FOS publishes the figures in DISP 3.7.4R. Annual indexation continues to lift the limit each April.

Why this matters for PI

The FOS limit affects PI in three ways. First, the headline severity of complaint-driven claims is now substantially higher. A single pension transfer complaint that would once have produced a £150,000 maximum award can now produce three times that. Second, the IPRU-INV 13.1 requirement that PI policies cover FOS awards means insurers are paying out at the new, higher level. Third, the aggregation question matters even more — a cluster of FOS-eligible complaints can exhaust the annual aggregate quickly.

Our IFAs PI insurance guide sets out the IPRU-INV interaction in detail. Our insurance brokers PI insurance guide covers the MIPRU 3 position for insurance distributors, who are also exposed to FOS jurisdiction. Solicitors who hold themselves out as advisers — for example, in the conduct of probate or financial-planning-adjacent estate work — should also read our solicitors PI insurance guide for the SRA MTC position on regulatory awards.

Eligible complainants

FOS jurisdiction extends to eligible complainants under DISP 2.7. The categories include consumers, micro-enterprises, small businesses (with annual turnover under £6.5 million and either fewer than 50 employees or balance sheet under £5 million), charities with income under £6.5 million, and trustees of trusts with net asset value under £5 million. Many advised businesses now fall within the SME band, which means commercial advice can give rise to FOS exposure, not just retail advice.

The FCA Handbook references

The award limit is set out in DISP 3.7.4R; eligible complainants in DISP 2.7; the firm's complaint handling rules in DISP 1.4 to 1.6. Time bar rules under DISP 2.8.2R require complaints to be made within six years of the event or three years of awareness, whichever is later — though some complaints fall outside even those windows where there is good reason.

Reserving

For PI reserving purposes, firms should consider whether their case-by-case reserve assumptions reflect the £445,000 limit and not the £150,000 historic limit. Insurers reserving on book-wide assumptions have updated since April 2024; firms reserving internally for SUP 16 financial returns or for Consumer Duty MI should do likewise.