FCA condenses application price categories

The plan to increase fees for straightforward applications from £1,500 to £2,500, and for moderately complex ones from £5,000 to £10,000. A consultation for these proposals closed at the start of 2021, with the results being published in April of that year. 

In the feedback it received, it found that there were no objections for the rationale that applicants should make a larger contribution towards costs to reduce pressure on existing fee-payers. Some did, however, argue that the FCA should have limited the increases to inflation while several others suggested that the time was not right to raise prices as the economy starts to recover. 

Off the back of this, the regulator has said it has condensed its charges into 10 simple pricing categories, revalorised them in line with inflation then moved them up or down to the nearest pricing category. 

Overall, 49 charges have gone up - 23 remained unchanged and 11 were reduced. The  category one fee has been set at £250, while the category 10 fee has been set at £200,000. 

Rules around the application fees for claims management companies have also changed. Prior to this, firms with an estimated income over £1m would be charged £10,000, while those with an income of under £1m would be charged a lower fee of £1,200. 

The FCA has now removed the income-based fee but introduced a category four charge of £2,500 for lead generators who apply only for permission of seeking out people who may have a claim. Lead generators who seek permission for the less restricted activities of “advice, investigation or representation” will continue to pay the full £10,000 charge. 

In a statement on its website, the regulator said: “We believe that the overall impact of our proposals would raise the contribution of applicants towards the cost of processing their applications from about a third to about two-thirds. We consider this a fairer apportionment in principle, though there would not be a large practical impact on existing fee-payers.”