The increased productivity helped the Ombudsman cut its total stock of cases from 165,000 at the end of 2020/21 to 112,000 at the end of 2021/22, according to its annual report published this week.

The FOS estimated that a, ‘steady state’ stock level target should be around 50,000 cases.

However, the FOS has increased its compulsory jurisdiction levy by over 10% to £106m (2021/22: £96m) for 2022/23 to fund its transformation programme.

The Ombudsman will also reduce its free case allowance for individual firms from 25 to 3 in line with its “polluter pays” approach.

The FOS has targeted an additional 7% improvement in underlying productivity and will invest an additional £14m in contingent case handlers to reduce its case queues.

Productivity at the FOS improved as a result of steps taken under its Action Plan published in December 2021, according to the Ombudsman.

The total spending pot for the FOS’ Action Plan is £18m, with £12m being reallocated from 2021/22’s restructuring budget.

The Ombudsman’s transformation programme is geared toward delivering people, process and system improvements to increase output delivery and speed up turnaround times while maintaining quality and decreasing costs.

The plan also targets a reduction in the number of complaints referred to the Financial Ombudsman Service.

The FOS said the operational productivity improvements under the Action Plan should deliver a 28% increase in productivity by the end of Q4 2023/24.

By increasing efficiency, the FOS said it will resolve cases at lower costs, with the current trajectory seeing it no longer run at a deficit by 2024/25.

In 2021/22 the Ombudsman’s “business as usual” costs remained flat, with a cost base of £246m, excluding one-off restructuring costs. The FOS made a £10m investment in its capacity to resolve complaints in high volumes over the year.

The Ombudsman’s income was funded primarily by the compulsory jurisdiction levy (44%) of £96m and case fees (32%) which increased to £750 per case.

Operating revenue was £221.7m (2020/21: £245.1m) with a cost base of £233.6m (2020/21: £264.5m).

The FOS received 40% fewer new complaints in 2021/22 than in 2020/21 as PPI cases ended. The most complained about sectors were banking and credit followed by insurance.

The Ombudsman received 14,931 complaints about investments and pensions with the same number of complaints resolved. This included 550 complaints about the British Steel Pension Scheme (BSPS), of which it upheld over 90%.

According to its annual report, the FOS found the complaints about investments and pensions to be some of its most challenging cases, taking the longest to resolve.