Guide to lodging a complaint against your financial services institution
In a bid to modernise and streamline the UK's financial redress system, the Treasury has proposed a series of changes to the way complaints are handled by the Financial Ombudsman Service (FOS). These reforms, announced by Chancellor Rachel Reeves in her Mansion House speech, aim to create a more predictable, efficient, and fair system for resolving financial disputes.
One of the key changes is the introduction of an absolute statutory time limit of 10 years for bringing complaints to the FOS. This time limit applies from the date of the event complained of, with some exceptions for longer-term products like pensions, mortgages, and long-term investments. Complaints must also be brought within six years of the event or, if later, three years from when the complainant became aware (or reasonably should have become aware) of the issue, but no later than the 10-year absolute limit.
Other significant changes include:
- Adapting the “fair and reasonable” test so that the FOS must find a firm’s conduct fair and reasonable if the firm complied with Financial Conduct Authority (FCA) rules as intended, rather than the FOS making its own subjective judgment in all circumstances.
- Formalising a framework to resolve FCA rule ambiguities, requiring the FOS to seek an FCA view on uncertainties in the rulebook, with the FCA obligated to respond, improving clarity and consistency.
- Greater flexibility in managing mass redress events, including enabling the FOS to pause complaints handling without needing industry consultation, to respond better to large-scale cases.
- A new option for firms and complainants to seek FCA clarity on rules before the FOS issues a final decision, enhancing predictability.
- Introduction of a new interest rate for redress awards, moving from a fixed 8% to tracking the Bank of England base rate plus 1%, while continuing to reflect actual consumer losses.
- The FOS is also consulting on introducing different levels of case fees for firms to promote fairness and encourage early resolution.
If consumers are unhappy with a decision or have not had a response after eight weeks, they can then complain to the FOS. Complaint forms can be downloaded from the FOS website, and there are no costs to complain to the FOS. Providers need to give a response within eight weeks on if the complaint is successful, how it will be resolved, or why they need more time to investigate.
The FOS will focus on resolving individual disputes quickly and with minimum formality after the reforms, making it a simple and quick dispute resolution service. The changes aim to support UK growth by providing quick and fair compensation where consumers are owed it, while reducing regulatory red tape.
The consultation on these changes to the FOS closes on 8 October 2025. The reforms, expected to begin from January 2026, aim to modernise and bring more predictability, fairness, and efficiency to financial dispute resolution and redress processes in the UK.
[1] HM Treasury. (2023). Reforming the Financial Ombudsman Service: A modern, agile, and responsive redress system. Retrieved from https://www.gov.uk/government/publications/reforming-the-financial-ombudsman-service/reforming-the-financial-ombudsman-service-a-modern-agile-and-responsive-redress-system
[2] Financial Conduct Authority. (2023). Consultation Paper No. 23/1: Proposals for reforming the Financial Ombudsman Service. Retrieved from https://www.fca.org.uk/publications/consultation-papers/cp23-1-proposals-for-reforming-the-financial-ombudsman-service
[3] Financial Ombudsman Service. (2023). Proposals to reform the Financial Ombudsman Service. Retrieved from https://www.financial-ombudsman.org.uk/news/proposals-to-reform-the-financial-ombudsman-service
[4] Financial Ombudsman Service. (2023). Financial Ombudsman Service: Making a complaint. Retrieved from https://www.financial-ombudsman.org.uk/consumer/complaints/making-a-complaint
[5] Financial Conduct Authority. (2023). Policy Statement No. 23/6: Changes to the Financial Ombudsman Service. Retrieved from https://www.fca.org.uk/publications/policy-statements/ps23-6-changes-to-the-financial-ombudsman-service
- To effectively manage financial disputes, the new reforms aim to introduce an absolute statutory time limit of 10 years for complaints related to pensions, mortgages, and long-term investments, ensuring that consumers can claim for financial losses from these products within the stipulated time frame.
- The proposed changes also include adapting the "fair and reasonable" test to consider a firm's compliance with Financial Conduct Authority (FCA) rules as an indication of fairness, potentially impacting the finance and business sectors by enhancing predictability in the resolution of financial disputes.
