PPI claims 'to rise into next year'
Payment protection insurance compensation claims are predicted to rise for the rest of the financial year and into the next, around double in 2010-11 compared with this year.
Around 8,000 PPI claims are expected in 2010-11, said the Financial Services Compensation Scheme (FSCS). The increases could raise the levies on insurance firms. The FSCS expects investment compensation costs to rise significantly in the coming months given recent investment firm failures.
However, the overall volume of claims in traditional areas like mortgage endowment and pensions review claims are expected to fall.
"Although the situation is fluid, our current assumption is that around 8,000 PPI claims will come in during the next year. That's almost double the number we expect this year," said FSCS chief executive Loretta Minghella. We take great care in determining our indicative levies though our primary obligation is to deliver compensation to those entitled to our protection."
The FSCS will review its claims and funding assumptions and announce interim levies and the initial 2010/11 levy in March.