At A Glance
Fast takeaways for decision-makers.
- 1Firms face £7.5bn in motor finance redress costs starting immediately under PS26/3, with most claims to be settled by end-2027.
- 2The FCA has shifted from consultation to enforcement, mandating an industry-wide scheme covering 2007-2024 with £7.5bn in expected payouts. Unlike previous discretionary complaints handling under DISP 1.3.
- 3The FCA is moving beyond SYSC 21.1.1R's general resilience principles to prescribe exact incident reporting thresholds and third-party oversight for payments firms.
- 4What was marketed as BNPL now falls under full FCA regulation as Deferred Payment Credit (DPC) from 15 July 2026. The rules create a new product category distinct from existing BNPL offerings, requiring affordability checks and modified financial promotions.
Source Notes
Source Evidence
PS26/4: Financial Services Compensation Scheme - Management Expenses Levy Limit 2026/27Policy Statement PS26/4
Source Evidence
PS26/3: Motor finance consumer redress schemePolicy Statement PS26/3
Source Evidence
PS26/2: Operational incident and third party reportingPolicy Statement PS26/2
Source Evidence
PS26/1: Regulation of Deferred Payment Credit (unregulated Buy Now Pay Later)Policy Statement PS26/1
Source Evidence
CP26/1: The Value for Money FrameworkConsultation Paper CP26/1
At a Glance
Firms face £7.5bn in motor finance redress costs starting immediately under PS26/3, with most claims to be settled by end-2027.
This Week's Developments
REF: PS26/3 Motor finance consumer redress scheme
The FCA has shifted from consultation to enforcement, mandating an industry-wide scheme covering 2007-2024 with £7.5bn in expected payouts. Unlike previous discretionary complaints handling under DISP 1.3.
REF: PS26/2 Operational incident and third party reporting
The FCA is moving beyond SYSC 21.1.1R's general resilience principles to prescribe exact incident reporting thresholds and third-party oversight for payments firms.
REF: PS26/1 Regulation of Deferred Payment Credit
What was marketed as BNPL now falls under full FCA regulation as Deferred Payment Credit (DPC) from 15 July 2026. The rules create a new product category distinct from existing BNPL offerings, requiring affordability checks and modified financial promotions.
REF: PS26/4 FSCS Management Expenses Levy
The £112.9m MELL for 2026/27 represents a 14% year-on-year increase, reflecting expanded FSCS IT infrastructure costs. Unlike compensation levies, this non-negotiable operational cost must be budgeted by all authorized firms before the 1 April 2026 implementation date.
REF: CP26/1 Value for Money Framework
Workplace pension providers face radical transparency requirements, including new forward-looking metrics and four-tier performance ratings.
What Firms Should Do
| Action | Owner | Deadline | Source |
|---|---|---|---|
| Establish motor finance redress working group to implement PS26/3 claims handling process | Chief Claims Officer | 15 April 2026 | PS26/3 para 2.14 |
| Update CONNECT operational incident reporting templates per FG26/3 Appendix A | Head of Operational Resilience | 18 March 2027 | PS26/2 Section 5 |
| Submit Deferred Payment Credit product applications via Gabriel system | Product Compliance Lead | 30 June 2026 | PS26/1 para 3.7 |
| Calculate 2026/27 FSCS MELL allocation using latest FCA fee-block methodology | Finance Director | 1 April 2026 | PS26/4 Annex 1 |
The Bigger Picture
This week's publications span redress (PS26/3 motor finance), operational standards (PS26/2 incident reporting), product regulation (PS26/1 DPC), and funding (PS26/4 FSCS levy).
Source Evidence
| Source | Document type | Published | Why it matters |
|---|---|---|---|
| PS26/4: Financial Services Compensation Scheme - Management Expenses Levy Limit 2026/27 | Policy Statement (PS26/4) | 31 March 2026 | Mandatory £112.9m industry levy for FSCS operational costs |
| PS26/3: Motor finance consumer redress scheme | Policy Statement (PS26/3) | 30 March 2026 | £7.5bn binding redress scheme for 2007-2024 cases |
| PS26/2: Operational incident and third party reporting | Policy Statement (PS26/2) | 18 March 2026 | Standardised incident reporting thresholds and third-party oversight |
| PS26/1: Regulation of Deferred Payment Credit (unregulated Buy Now Pay Later) | Policy Statement (PS26/1) | 11 February 2026 | BNPL products brought under FCA regulation as DPC |
| CP26/1: The Value for Money Framework | Consultation Paper (CP26/1) | 8 January 2026 | Proposed workplace pension performance metrics and ratings |
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