Consumer lifeboat service the Financial Services Compensation Scheme (FSCS) has awarded the contract for its core claims handling to professional services giant PwC.

PwC will begin handling FSCS claims this autumn as part of a phased transition plan.

Current claims handling contracts will end on 31 March 2025.

The new contract with PwC is part of a move by the lifeboat to increase the proportion of the claims it processes in-house. The FSCS has already opened a new customer contact centre at its London office as part of this transition.

Martyn Beauchamp, interim CEO at the FSCS, said the transition should be smooth.

Sarah Marin, chief customer officer at FSCS, said the core claims services is where many financial advice claims are handled.

She said: “Our core claims service is the largest part of our operation, and it’s where some of FSCS’s most complex claims for pensions and investments are handled. Alongside our larger in-house team, working with PwC will give us the flexibility we need to handle the variety and volume of claims that now come to us.”

Last month the FSCS reduced its annual levy on the industry for 2024/25 to £265m.

The FSCS said that while it expects to pay £363m in compensation during 2024/25, it had been able to reduce the levy in part due to recovering over £54m from the estates of failed firms and other parties during 2023/34.

The FSCS added that the reduced average compensation values on pension transfer claims, as well as expecting to receive fewer new claims, played a role in the levy reduction.

In January the FSCS said it will increase its workforce by about 25% by 2024/25 to cope with a surge in complex cases.

The FSCS headcount will rise from 254 to 321 with the recruitment of 67 new staff.

The consumer safety-net plans to fund the increase by bringing a large chunk of work back in-house as its moves to a ‘new operating model’ with more senior expert case handlers.

The FSCS said that while there was no confirmed date for the recruitment, the additional costs were planned for in the 2024/25 budget.

The next FSCS levy outlook will be published in the autumn.