The FCA’s latest complaints data shows an industry under steady pressure to deliver better customer outcomes.
In the first half of 2025, firms received 1.85 million complaints, a 4 percent rise on the previous period. Redress payments increased to £283 million, up 20 percent, and the average compensation payment grew from £207 to £238. The proportion of complaints upheld remained close to 57 percent, a level that has shown little movement for several reporting cycles.
Given the regulator’s continued focus on fair treatment and customer outcomes, these increases are not surprising. They do, however, highlight that many firms still need to strengthen the way they support customers and prevent issues from arising in the first place.
Read more: FOS Reports Surge in Irresponsible Lending Complaints – What Firms Need to Do on Remediation
Complaint increases reflect areas under closer regulatory scrutiny
The areas showing the most notable rises include banking, credit cards, investments, and decumulation and pensions. Banking and credit card complaints increased by 7 percent, investment complaints rose by 10 percent, and decumulation and pensions complaints grew by 6 percent, including a significant rise in trust-based pension complaints.
By contrast, home finance complaints fell by 6 percent and insurance-related complaints remained broadly stable. These shifts reinforce the importance of clearer communication, stronger oversight and closer monitoring where customers are more exposed to potential harm.
Rising redress costs underline the financial impact of poor outcomes
The continued rise in both total redress and average compensation suggests that customer harm is not only widespread but increasingly costly to resolve. With upheld complaint levels remaining consistently high, the data points to ongoing weaknesses in areas such as product design, disclosure, affordability checks, poor advice and ongoing support.
The motor finance case is a clear example of how issues can establish over a period of time when customers are not treated fairly. It is far more sustainable for firms to prevent harm than to manage large-scale remediation exercises later.
Read more: Motor Finance Redress: What the 1 August Ruling Means – and What Lenders Should Be Doing Now
Firms should focus on strengthening the basics
The stability of the upheld rate shows that many issues could have been avoided through stronger controls and more proactive oversight. Firms should use this period to assess whether their frameworks are delivering fair outcomes and meeting Consumer Duty expectations. Key areas of focus should include:
- Reviewing whether products deliver fair value
- Ensuring affordability and suitability checks remain robust
- Improving monitoring of customer outcomes
- Strengthening support for vulnerable customers
- Reviewing operational capacity for remediation
- Ensuring records clearly evidence how decisions were made
These steps remain essential in reducing both customer harm and future redress costs.
Early action remains the best way to manage risk
Although overall complaint volumes have stayed within a familiar range since 2021, the increase in redress shows that the financial impact is becoming more significant.
Firms that invest now in clearer communication, better data, and stronger remediation frameworks will be better placed to manage regulatory expectations and reduce future risk. Complaints data provides valuable insight into where customers struggle, and using it proactively is one of the most effective ways to improve outcomes and strengthen trust.
Get in touch for support from our Insurance, Regulatory and Risk team.
