The Financial Services Compensation Scheme (FSCS) paid out £181m less in claims over the past financial year.
This is due to a reduction in complex pension cases and higher uphold rates against Sipp claims.
In annual accounts published today (18 July) the lifeboat fund said it paid out £403m in 2022/23 compared to £584m in 2021/22.
Specifically, there was a £33m reduction in compensation costs as it processed fewer complex pension claims.
These largely related to Capital & Income Solutions Ltd and British Steel IFA Pembrokeshire Mortgage Centre Ltd.
It said the bulk of the compensation for these failures was paid out to customers in 2021/22.
Also, there was a £33m reduction in compensation costs for Sipp advice claims due to higher rejection rates and the processing of fewer claims.
Nonetheless administration expenses increased from £79m (2021/22) to £85m.
This increase was, in part, due to a need for pension claims contractors with experience in specialist software to model hypothetical pension benefits.
There was also a substantial increase in the costs associated with recoveries which required legal advice and expertise.
These annual accounts are the last under recently departed chief executive Caroline Rainbird who left at the beginning of June.
The lifeboat fund has yet to appoint a replacement.
Commenting on the latest annual accounts, FSCS’s chief financial officer Fiona Kidy said: “The past year has been dominated by the rising cost of living, which in turn has also led to a greater focus on people’s personal finances. In connection to this, there has also been a greater focus on the protection that FSCS and other organisations offer.
“Highlighting the importance of FSCS protection and our limits was the near insolvency of Silicon Valley Bank UK Ltd (SVB UK) at the end of the financial year. During March, our bank and savings protection checker received more than 100,000 checks in a single week. This is approximately four times the usual amount.”
She added: “Although FSCS ultimately did not need to step in, I’m very proud that my colleagues pulled out all the stops to ensure we were ready to help SVB UK’s customers.
“As ever, we look forward to the year ahead safe in the knowledge that we are prepared for any challenges that may arise. FSCS will continue to play an important role in building consumer trust and confidence in financial services.”
