Consultation on the review of the Financial Ombudsman Service closes

The government's consultation on its review of the Financial Ombudsman Service (FOS) closed on 8 October 2025, after a 12-week period¹. The review was carried out by the Economic Secretary to the Treasury, Emma Reynolds MP, and sets out proposed reforms to the legislation that establishes the FOS¹.

The FOS was established by the Financial Services and Markets Act 2000 and is operationally independent from both the Financial Conduct Authority (FCA) and the government¹. Under the current framework, the FOS cannot consider a complaint referred to it "more than: (a) six years after the event complained of; or (if later) (b) three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint"¹. The government proposes an absolute time limit in legislation requiring complaints to be brought within 10 years of the conduct complained of¹.

The consultation sets out a package of proposed reforms, which the government says it will implement through legislation when Parliamentary time allows¹:

The government is also considering requiring the FOS to publish quarterly thematic guidance on how particular types of case are investigated, and is seeking views on whether there would be benefits to making the FOS a subsidiary of the FCA¹. The consultation states that the FOS publishes over 20,000 decisions a year, and that firms have no right to reject a FOS determination and no route of appeal¹.

The FCA and the FOS published a joint consultation alongside the government's review, responding to their joint Call for Input on Modernising the Redress System published in November 2024¹. The FOS is also introducing a new standard interest rate on compensation awards, which it says will be updated to better reflect market conditions¹.

Why it matters for households

The proposed 10-year absolute time limit would set a fixed cut-off for bringing a complaint to the Financial Ombudsman Service, running from the date of the conduct complained of rather than from when a consumer became aware of a problem¹. The existing time limits of six years from the event, or three years from awareness, would sit alongside this new absolute limit¹. The government says the change is intended to avoid the FOS having to deal with a high number of historic cases¹.

The proposed "fair and reasonable" test would mean that where a firm complied with relevant FCA rules, in line with the FCA's intent for those rules, the FOS would be required to find its conduct fair and reasonable¹. The consultation states there would be no retrospective application by the FOS of contemporary FCA rules¹.

The reforms would also change how mass redress events and wider implications issues are handled, with the FOS obliged to refer such matters to the FCA¹. The government says this is intended to avoid delays to other cases when the FOS handles complaints related to a mass redress event¹.

What happens next

The consultation closed on 8 October 2025¹. The government says it will use changes to legislation, when Parliamentary time allows, to deliver the reforms¹. The FCA and the FOS said they would begin implementing changes from the date of publication, where they can, ahead of the legislation needed for the government's proposed reforms¹. The consultation document was updated on 20 May 2026¹.