The Financial Ombudsman Services will freeze case fees and levies for firms for the 2025/26 financial year.

Charges were reduced for the current financial year, with case fees coming down to £650 for respondent businesses, as well as a reduction to the compulsory and voluntary jurisdiction levies.

The Ombudsman said it expected its fees and levies freeze to save the industry £70m in comparison to 2023/24.

According to the plans and budget for 2025/26, the expected cost per case will reduce to £1,044 compared to a forecast cost of £1,082 for 2024/25. The savings are the result of the Ombudsman’s investment in new technologies and tools, according to the report.

Machine learning or AI is being used to allocate cases quicker. Improved analytical capabilities have led to the FOS more than halving its case handling time since 2021/22. The median time to resolve a case for 2023/24 was 3.1 months, in comparison to 6.4 months in 2021/22.

The Ombudsman is predicting high demand for its services next year, expecting around 240,000 cases in 2025/26, according to its proposals for the year.

So far in 2024/25 the Ombudsman has received over 190,000 cases covering areas such as complex fraud and scams, unaffordable lending and car loan agreements.

Abby Thomas, chief executive and Chief Ombudsman, said the FOS plans to continue to invest in technology to improve efficiency.

She said: “I’m keen to continue modernising our service and the framework within which we work – leveraging technology and the expertise of our people to streamline processes while upholding the high standards of service that consumers and businesses rightly expect.”

The budget released by the FOS assumes that it will receive £3m from professional representatives and Claims Management Companies (CMCs) in the next financial year.

Plans to introduce a charge for cases brought to the service by these professional representatives are currently undergoing the regulatory approvals process so full details and a timeline for implementation will be outlined in a Policy Statement published in the new year.

The consultation on the FOS’s plans and budget is open until 29 January.