The 3.2 per cent reduction will reduce the amount individual firms have to pay in fees and has been achieved by cutting internal IT costs and the return of contingency money set aside for emergencies requiring extra resources.

This means the increase from 2011/12 to 2012/13 is now 11.9 per cent rather than 15.6 per cent which was originally proposed in February. The reduction will be distributed evenly between all fee-payers except those who only pay the minimum fee.

The FSA’s minimum fee, payable by the majority of Financial Planning firms, will remain at £1,000.

The FSA said: “The FSA recognises the difficult economic circumstances for many firms and is committed to keeping any essential costs to a minimum. Fees are determined on basis of activity based costing. In consequence the overall increase in fees will be borne mainly by larger firms, reflecting the resources applied to the intensive supervision of high impact firms.”

Large banks will now pay on average £20m, general insurers will pay on average £2.4m and life insurers will pay on average £5m.

Further details can be found in policy statement PS12/11 which is available on the FSA website at http://www.fsa.gov.uk/library/policy/policy/2012/12-11.shtml