The Financial Services Compensation Scheme (FSCS) is set to increase its levy yet again, putting more pressure on firms’ bottom lines.

The planned increase was dubbed a “bitter pill to swallow” by financial advice and wealth management trade association PIMFA, especially as businesses were under pressure from the coronavirus pandemic.

The FSCS’s mid-year outlook showed the scheme projected to pay out £381.6 million in compensation this year, 41 percent more than the £269.1 million it predicted in May. This would lead to a £92.1 million deficit for this year, resulting in a supplementary levy for contributing ...