FOS reforms: the clock is still ticking

The Financial Ombudsman Service (FOS) decides disputes by reference to what is ‘fair and reasonable’ in all the circumstances. HMT, the FCA and FOS have been working on reforms designed to make outcomes more predictable, particularly by reference to what the FCA’s rules required at the time, and by improving how ‘big issue’ complaints are handled. The FCA/FOS consultation paper on this issue, which was published in July 2025, can be found here.

An update and further consultation were widely expected in February 2026, but that has not yet materialised. The most likely explanation is simple slippage: these reforms cut across FOS process, FCA rule interpretation and HMT policy (and, for the ‘fair and reasonable’ test, will probably require legislation). The next public step is expected to occur later in Spring 2026, with any substantive changes to the FOS framework more likely to follow once Parliament has time to legislate, which could push it into late 2026.