Guide on Filing a Grievance with Your Financials Company
The UK government has proposed significant changes to the financial redress rules, aiming to modernise and streamline the system. These reforms, known as the Leeds Reforms, were announced by Chancellor Rachel Reeves at Mansion House in July 2025.
The key change is the introduction of a 10-year absolute time limit for bringing consumer complaints to the Financial Ombudsman Service (FOS), with some exceptions for long-term products. This move is expected to provide certainty and reduce delays in complaint resolution.
The FOS will also have adapted powers, such as the ability to refer issues arising from complaints to the Financial Conduct Authority (FCA) when there is ambiguity in rule interpretation. Firms and complainants will be able to seek FCA clarity on rules before a final FOS decision, ensuring a fair and consistent resolution.
The FCA will gain more flexibility to manage mass redress events, including pausing complaint handling if needed. The FOS plans to introduce a new case fee system based on complaint circumstances to encourage early resolution and fairness.
Another notable change is the alteration of the interest rate on compensation awards. The rate will change from a fixed 8% to a time-weighted Bank of England base rate +1%.
The reforms also aim to give the FOS more flexibility in handling complaints, particularly when major issues are uncovered. The FOS considers complaints about residential mortgages, insurance products, pensions, and investments, but not about stock market performance.
If you have a complaint about a regulated financial product or service, the FOS should be your last resort. The first step should be to complain to the provider in writing within eight weeks. If you are unhappy with the decision or response, the complaint can be escalated to the FOS.
It's important to note that complaints to the FOS do not incur any costs. However, legal action is another option, but it will incur costs for legal advice and court fees. Claims management companies can help with complaints on a no-win-no-fee basis, but they may take a large chunk of any compensation received.
These reforms aim to create a system that is more predictable for firms and supports UK growth. They also aim to identify problems before they become a problem, rather than dealing with issues after they arise. The FOS upheld 37% of complaints in the first quarter of the 2024/25 financial year, showing the need for effective dispute resolution mechanisms.
The consultation for the proposed changes closes on 8 October 2025. The reforms are part of the Leeds Reforms, which focus on reducing regulatory red tape. The FCA is expected to have the ability to dismiss collective groups of complaints by referring them to the Treasury for regulatory action instead.
[1] Treasury Press Release: Leeds Reforms Announced - July 2025 [2] FCA Press Release: Leeds Reforms and Financial Redress Changes - July 2025 [3] FOS Press Release: Leeds Reforms and Financial Redress Changes - July 2025 [4] Chancellor Rachel Reeves Speech at Mansion House - July 2025
- The Leeds Reforms, proposed by the UK government, include a change in the interest rate on compensation awards for pensions, shifting from a fixed 8% to a time-weighted Bank of England base rate +1%.
- The proposed reforms aim to streamline the financial redress system by introducing a 10-year absolute time limit for bringing consumer complaints to the Financial Ombudsman Service (FOS), particularly for long-term products like pensions.
- In the realm of policy-and-legislation, these Leeds Reforms also grant the Financial Conduct Authority (FCA) more flexibility to manage mass redress events, which could affect businesses in the finance sector.
