Financial Services and Markets Bill introduced in the House of Lords on 19 May 2026

The Financial Ombudsman Service has set out its final position on modernising the redress system, following a consultation that ran between March and May 2026 and drew 92 responses from firms, trade bodies, consumer groups, professional representatives and individual consumers¹. The policy statement, published in August 2026, confirms that formal rule changes will take effect from 1 October 2026¹. The government's wider reforms are being taken forward through the Financial Services and Markets Bill, which was introduced in the House of Lords on 19 May 2026¹.

The Ombudsman will introduce a registration stage within its complaint handling framework, as set out in CP26/9¹. Formal rules will follow alignment with a separate consultation on case fees¹. Most responses, 75%, gave broad support for a registration stage, though the Ombudsman describes that support as conditional, particularly from consumer groups that felt able to offer only limited support¹. The service says cases often reach investigation without the core information needed to assess their merits: where that happens, complaints take over three weeks longer on average to reach a first assessment, and in around 500 cases a year parties are asked for further information at least ten times before an initial outcome¹. Over 20% of cases move back from investigation to earlier stages, and of the 225,000-plus cases resolved in 2024/25, over 10% were withdrawn or abandoned before receiving a first assessment¹. A YouGov survey cited in the statement found around a quarter of respondents said being asked to provide information earlier could make them less likely to pursue a complaint¹.

Changes to the Ombudsman's dismissal powers will also proceed, with one minor amendment made in response to feedback¹. The refreshed dismissal grounds follow revocation of the Alternative Dispute Resolution (ADR) Regulations 2015 on 6 April 2026¹. In the 2024/25 financial year, the service resolved over 225,000 complaints and dismissed just over 1,000¹. Since 2019, over 1,300 first-stage behaviour warnings have been issued¹.

The Ombudsman will amend DISP 3.6.4R of the FCA Handbook to clarify that decisions are based on the standards applicable at the time of the act or omission complained about¹. The rule change takes effect from 1 October 2026 but will apply to all current and future complaints, as the change is clarificatory only¹. The reference to "good industry practice" will be retained at this stage, with the position kept under review as the Bill progresses through Parliament¹. Responses on this point diverged: industry respondents generally supported the direction, while consumer groups and individual consumers raised concerns about removing "good industry practice" as a consideration¹.

Why it matters for households

The Ombudsman handles individual complaints between financial businesses and eligible complainants, and also looks at complaints from small and medium-sized enterprises about financial firms and from customers of claims management companies¹. Anyone with a complaint already in the system, or thinking about making one, is affected by the timing changes: the registration stage alters when information is provided rather than what is required, and the service says it is not intended to introduce an additional evidential threshold¹. The dismissal changes take effect from 1 October 2026, and the clarification to the fair and reasonable test applies to all current and future complaints from that date¹. The Ombudsman says it will report after the first year of operation on the impact of the dismissal changes, and will develop guidance, staff training and monitoring alongside the registration pilots¹. How the registration stage interacts with case fees has been deferred to a later consultation, so the fee position for complaints filtered out before full investigation has not yet been settled¹.

What happens next

Pilots of the registration approach begin with fraud and scams casework in October 2026, with cases continuing to be accepted under current arrangements during testing¹. Formal rule changes for the dismissal framework and the fair and reasonable test take effect from 1 October 2026¹. Rules for the registration stage will follow alignment with the case fees consultation¹. The Financial Services and Markets Bill, introduced in the House of Lords on 19 May 2026, continues its passage through Parliament¹.