FOS consults on interest rates applied to compensation awards

On 4 June 2025, the Financial Ombudsman Service (FOS) issued a consultation paper on interest on compensation awards.

The paper outlined four proposals for calculating interest on compensation awards, these included maintaining the current 8 per cent rate and adopting a fixed rate lower than 8 per cent.

The consultation is open to feedback until 2 July 2025, with stakeholders, including consumers, financial firms and industry bodies encouraged to share their views on the proposals.The FOS will then consider feedback and aim to publish a policy statement in September 2025.