Category: Dispute resolution · Reviewed by Mark Fox, Broker · Renewals · Last reviewed 2026-06-11
The FOS award limit is the maximum monetary compensation the Financial Ombudsman Service can bindingly direct a firm to pay; the current limits are £430,000 for complaints referred on or after 1 April 2024 in respect of acts or omissions from 1 April 2019, and £190,000 for acts or omissions before 1 April 2019.
Category: Dispute resolution Also known as: FOS maximum award, FOS compensation limit, Ombudsman award cap Related concepts: Financial Ombudsman Service, FOS jurisdiction, FOS time limits, Insurance dispute
The FOS award limit is the statutory cap on the binding monetary remedy that the Financial Ombudsman Service can direct an authorised firm to pay following a determination on the merits. If the Ombudsman concludes that fair compensation exceeds the limit, the FOS can recommend (but not bindingly direct) payment of the additional amount, leaving the complainant to litigate for the shortfall in the courts.
The award limit applies to the principal compensation awarded for loss. It does not include interest awarded on the compensation, costs (if any), or distress-and-inconvenience awards in addition to financial loss, but in practice the limit acts as a single binding ceiling on monetary remedies.
The award limit framework is band-structured by reference to the date of the act or omission complained of, not the date of the complaint. This produces a two-tier structure currently: a higher band for newer acts (from 1 April 2019) and a lower band for older acts. The limits are indexed annually to inflation.
The statutory authority to set the award limit is in the Financial Services and Markets Act 2000, sections 229 and 229A (introduced by amendments), and Schedule 17. The detailed rules are in the FCA Handbook, Dispute Resolution: Complaints (DISP) at DISP 3.7.
The current limits, introduced by the FCA in PS18/21 with effect from 1 April 2019 and updated annually:
The FCA indexes the limit annually by reference to the CPI movement, rounded to the nearest £5,000. Updated figures are notified through Handbook releases.
The bifurcated structure was introduced because the 1 April 2019 uplift was substantial; applying it retrospectively to all complaints would have created prudential and policyholder protection implications for firms whose pricing and reserving had been based on the lower historical limit.
Where a complaint involves a course of conduct straddling 1 April 2019, the Ombudsman considers which limit applies to each tranche of loss, and may aggregate compensation up to the relevant cap for each.
When the Ombudsman issues a final decision quantifying compensation, the FOS first applies the relevant award limit to the principal sum. If the compensation falls below the limit, the firm is bound to pay the full amount on the complainant’s acceptance.
If compensation exceeds the limit, two things happen. First, the binding award is capped at the limit. Second, the Ombudsman may recommend payment of the excess. The recommendation is not binding but is publicly recorded and many firms comply voluntarily; refusal to comply may have regulatory and reputational consequences but no immediate legal consequence.
Interest is awarded separately and is usually calculated at 8% simple per annum from the date of loss to the date of decision. Some Ombudsmen award compound interest where appropriate. Interest is not generally subject to the principal award cap, although the FOS practice in this area is nuanced.
For distress and inconvenience, the FOS may award separate sums (commonly between £100 and £1,000, occasionally higher for severe cases). These are typically incorporated within the binding cap.
In multi-product or multi-policy complaints, the FOS may treat each “complaint” separately for award-limit purposes if they raise distinct subject matter. The Ombudsman’s analysis of “the complaint” is fact-sensitive and has been the subject of judicial review.
Where loss exceeds the cap, complainants face a strategic choice: accept the capped binding award (and waive the litigation right against the firm in respect of that complaint by virtue of the acceptance) or reject the FOS award and litigate for the full amount. Acceptance is generally viewed as accepting the determination in lieu of court proceedings on the same subject matter.
Historical limits (illustrative): - 1 April 2019 to 31 March 2020: £350,000 (new band) / £160,000 (legacy band). - Pre-1 April 2019: £150,000 from 1 January 2012, £100,000 prior to that.
Recommendation only: Where loss exceeds the binding cap, the Ombudsman may issue a non-binding recommendation. Firms regulated by the FCA face supervisory expectations to give serious consideration to compliance, although there is no legal obligation.
Interest: Conventionally 8% simple per annum from the date of loss, unless the FOS finds a different rate is fair (for example, where the loss represents lost investment growth that should be measured by reference to a benchmark return).
Distress and inconvenience awards: Separate from financial loss; typically £100-£1,000 but can reach several thousand in severe cases involving prolonged distress or vulnerable consumers.
Costs: The FOS does not generally award costs. The Service is free to complainants and there is no expectation of legal representation; consequently costs are not typically a feature.
Aggregation across complaints: Where multiple complaints by the same complainant against the same firm relate to the same subject matter, the FOS may aggregate them and apply a single cap. Distinct subject matters are treated separately.
Recoupment from the firm: Awards must be paid by the firm; FOS-awarded compensation is generally not recoverable from the Financial Services Compensation Scheme (FSCS) directly, although FSCS may pay if the firm fails.
A consumer is mis-sold a life-assurance investment product in 2020 by an FCA-authorised firm. The Ombudsman finds the firm liable and assesses the consumer’s loss at £510,000 (the difference between the actual portfolio value and what the consumer would have held in a suitable alternative product), plus distress and inconvenience of £750.
Because the act of mis-selling occurred after 1 April 2019, the higher band applies. The complaint was referred on 12 May 2024, so the £430,000 limit applies. The Ombudsman directs the firm to pay £430,000 plus interest at 8% from the date of investment to the date of decision, and £750 for distress and inconvenience (within the cap on aggregate). The Ombudsman recommends that the firm pay the remaining £80,000 of loss. The firm pays the binding £430,750 plus interest within 28 days, and after internal consideration also pays the recommended £80,000. Had the firm refused, the consumer could have litigated for the shortfall.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Next review: 2026-12-11.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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