The reappointment was made this week by the Financial Conduct Authority, with the approval of the Treasury.

The Conservative peer, who replaced Nicholas Montagu as chair in August 2019, said she was delighted to be reappointed.

She said: “I am looking forward to continuing to work with my board and my new executive team to deliver sustainable performance improvements, excellent service standards and value for money.”  

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She said that maintaining open and constructive dialogue with stakeholders, including the Treasury and the FCA, will be a key focus for the organisation.

She went on: “We will continue to ensure that our proactive engagement to share the valuable insights our casework provides will enable businesses to address their customers’ concerns quickly and fairly and reduce the number of complaints that need to be referred to our service.”

Richard Lloyd, interim chair of the FCA, said: “I congratulate Zahida on her reappointment and I look forward to continuing to work with her.”

He said the Financial Ombudsman Service fulfils an essential role in ensuring fair outcomes for consumers and financial services firms.

He added: “The extensive transformation programme initiated in her first term as chair will stand the service in good stead for the future.” 

Baroness Manzoor was appointed to the House of Lords in 2013 and was formerly the Legal Services Ombudsman and Legal Services Complaints Commissioner in England and Wales.

She began her career as a nurse and has since held a variety of executive and then board level positions including with the NHS.

She was awarded the CBE in 1998 for her services to the NHS and improving race relations in the UK.

Last month The Financial Ombudsman Service said it will freeze its fees for 2023/24 at 2022/23 levels due to the economic pressures facing firms. It expects to receive 183,000 complaints in 2023/24.