Money Covered: The Week That Was – 27 March 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at the Financial Conduct Authority's Vehicle Finance Redress Scheme Consultation, is now available.

To listen to this and all previous episodes, please click here.

Headline development

FCA to confirm approach to motor finance compensation scheme

Following consultation in October 2025, the FCA has confirmed that it will make an announcement setting out its final approach to the motor finance compensation scheme just after 4:30pm on Monday 30 March 2026. We'll of course provide more details in next week's edition.

Auditors

FRC announces major changes to audit supervisory model

The Financial Reporting Council (FRC) has announced that it will be making significant changes to its audit supervisory model.

With a view to enhancing audit quality and reinforcing resilience across the UK audit market, the FRC stated that it will be introducing a more proportionate, effective and integrated framework.

The FRC states that this revised approach will place more emphasis on firms' Systems of Quality Management, and that this will be at the heart of supervision activity. The FRC states that this more integrated method has been designed to promote a more resilient audit system, strengthen audit quality and ensure organisations continue to enjoy an environment in which they can confidently grow and scale.

The FRC has said that it will begin implementing these changes for the largest firms in April 2026, and that there will be further piloted developments throughout 2026/27. The FRC has said that these changes will complement its Building Capacity and Capability for Smaller Firms and SME Market Study initiatives, which support a more coordinated supervisory framework across both Public Interest Entity (PIE) and non-PIE audits.

To read more, please click here.

Mortgage brokers

FCA announces Later Life Mortgage study

Due to older homeowners relying on housing wealth in retirement, on 20 March 2026, the FCA announced the launch of a market study into whether change is needed to enable the lifetime and retirement interest only (RIO) mortgage sector to meet consumers' changing needs.

Lifetime and RIO mortgages operate in a similar way to standard mortgages in that they are loans secured against a homeowner's property. However, they are not typically used when purchasing a property and there is also no set mortgage term.

The market study will focus on the provision and distribution of these products to UK customers, as well as whether any new products could benefit consumers. The FCA states that the aim is to understand any barriers preventing firms from offering these products and to what extent consumers understand these products and their options.

The FCA has invited any views by 17 April 2026 and is aiming to publish an update by the end of 2026.

To read more, please click here.

Regulatory developments for FCA regulated entities

FCA sets out rules for ‘consumer segments’ ahead of 6 April targeted support launch

From 6 April, retail banks, pension providers and financial advisers authorised to provide targeted support will be able to begin targeted support  to customers as an alternative to individualised advice. The FCA has provided examples of how financial services firms should construct “consumer segments” when providing targeted support, ahead of the regime going live. 

The new guidance, comes on the back of the FCA's published policy statement and aims to provide firms with greater detail and support in making judgements. The regulator stresses that segments should comprise groups of customers with a shared financial support objective and, where relevant, common characteristics. Firms must be able to explain why a ready-made suggestion would be suitable (or unsuitable) for individuals within the group, without attempting a full fact-find akin to regulated advice.

The FCA outlines a three-step approach: assessing data readily accessible to the business area giving support; considering whether additional accessible data outside the core segment characteristics should influence suitability and, where relevant, disclosing to consumers where certain data has not been taken into account.

The watchdog warns that targeted support may not be appropriate where a firm cannot define a suitable suggestion without comprehensively assessing a consumer’s circumstances, and that any assumptions used in segment design must be reasonable.

To read more, click here.

FSCS sets out 5-year plan to deliver value to consumers and levy payers

The FSCS has published its 5-year strategy (for 2026-2031) to advance its purpose – to support financial stability and give confidence to consumers by ensuring consumers get continuity and compensation quickly when firms fail. 

The FSCS has set three core priorities: 

• continuing to optimise its claims model to deliver timely, high quality customer outcomes at any level of demand.
• embedding a strong purpose and performance-led culture that matches purposefulness with the highest standards of delivery; and
• acting as a responsible steward of the levy payers’ funds by operating efficiently, collaboratively and maximising recoveries.

For priority one claims the FSCS confirms it will simplify its processes and enhance the tools and technology it uses to boost productivity in the busiest parts of its service. 

For priority three (recoveries) the FSCS confirms it will prioritise high value recoveries to help offset the cost of compensation for levy payers and pursue those "that are reasonably possible" and "cost-effective". 

To read the three-point plan please click here. 

FCA Publishes its Regulatory Priorities report on Payments

On 25 March 2026, the FCA published its Regulatory Priorities report aimed at firms authorised or registered under the Payment Services Regulations 2017 (SI 2017/752) and the Electronic Money Regulations 2011 (SI 2011/99). The report sets out the FCA's priorities for the payments sector in 2026, in particular relating to:

• Supporting effective competition, innovation and growth: The FCA expects firms to prepare for regulatory changes, engage with it on future rules and use its support services to ensure compliance. The FCA will focus on support for open banking growth, regulation of payment services/electronic money, and explore integrating stablecoins into regulated payments.
• Ensuring firms implement the consumer duty effectively: Firms must continually check their products, services and processes against FCA rules, fix any gaps, and ensure transparent pricing and fair treatment of vulnerable customers, with the FCA threatening to take action where firms fail to address gaps.
• Protecting financial system integrity and keeping customers' money safe: Firms are expected to have effective governance and systems to identify, assess and mitigate risk and to invest as appropriate to further embed operational resilience into their processes. Firm should also be ready to implement the new safeguarding regime, which will come into force on 7 May 2026

Annual Regulatory Priorities reports are replacing FCA portfolio letters, and the FCA expects firms to read the reports in detail, consider the priorities they set out, and take action where appropriate.

To read the Regulatory Priorities report, click here.

FCA to legacy review trail commissions

Trail commissions, being commissions paid to advisors, brokers and other platforms are paid over the duration of the product's lifetime rather than in an up-front fee. Following the Retail Distribution Review in 2012, trail commissions were banned on all new investment products bought after 31 December 2012, however existing agreements made prior to that date were allowed to continue. 

In a consultation paper posted on 25 March, the FCA is seeking to open a discussion into the future of trail commissions so as to prevent potential consumer harm and ensure that consumers receive value for money. The FCA is seeking input from the profession in respect of the impact of trial commissions and the four proposed options for the next steps:

• maintain the status quo and allow the arrangements to continue.
• create greater transparency of trail commission arrangements for those affected, which will allow consumers to make more informed choices.
• end the existing arrangements in the future with a sunset date set; and
• end the existing arrangements but with a transitional period to enable financial advisers ‘more time to adapt, agree final payments’ or to blend previous trail commission payments in with ongoing advice charges.

The consultation closes on 22 May 2026. 

To read more, please click here.

FCA rules out action on funeral insurance plan

The FCA has confirmed it will not take further action in relation to the termination of the Family Protection Plan, following a review prompted by Government concerns.

The withdrawal of the product has affected around 5,000 policyholders, including individuals who had paid into the policy over many years. The plan provided a lump sum on death, primarily intended to cover funeral expenses.

The policy was underwritten by Maiden Life and distributed by credit union CM Mutual. Although closed to new members in 2009, existing members continued contributing in return for cover. Maiden Life subsequently exercised its contractual right to withdraw from underwriting, giving extended notice in 2024 to allow time to find a replacement insurer. CM Mutual was ultimately unable to secure an alternative provider, and cover expired after members were told in October that it would end 30 days later.

The FCA carried out a supervisory review of the product’s historic sale and the regulatory framework in place at the time. It considered the treatment of consumer rights, the value delivered, the adequacy of communications and disclosures, and whether its regulatory powers could address any resulting harm. It concluded that, given the limits of those powers, it would not take further action at this time in relation to historic conduct.

The issue drew parliamentary attention, with MPs raising concerns and the Treasury requesting that the FCA investigate. The FCA noted that some customers under 80 may still be able to obtain alternative cover, although not on equivalent terms, while others are likely to face difficulty given age-related limits in the market.

The FCA has indicated that its focus will now shift to supporting those unable to secure replacement cover. It has also engaged with CM Mutual and the wider credit union sector, with the industry exploring potential solutions.

More information regarding help for those affected by the closure of the Family Protection Plan can be found here.

FCA publishes 2026 priorities for the wholesale buy-side sector

On 19 March 2026, the FCA published its Regulatory Priorities report for the wholesale buy-side sector.  The report is aimed at asset managers, alternative asset managers, and custody and fund services providers.

The FCA’s focus for 2026 centres on three broad areas:

• Innovation and regulatory development - Firms are expected to have proper governance around the use of AI, DLT and other emerging technologies, with clear accountability and risk management. The FCA also intends to consult during 2026 on a more proportionate regime for AIFMs and on simplifying product-level climate disclosure requirements.
• Customer outcomes - There’s a continued emphasis on embedding the Consumer Duty in retail-facing business and applying a consumer lens to products such as model portfolio services and retirement solutions. Firms are expected to communicate clearly with investors and maintain effective oversight of appointed representatives. The FCA will consult in mid-2026 on how the Consumer Duty applies across distribution chains and to wholesale firms.
• Market integrity and resilience - Firms should review and strengthen governance and valuation processes, maintain effective arrangements for managing conflicts of interest, and ensure product development for retail products and retirement solutions aligns with Consumer Duty expectations.

The FCA has also issued a separate report for the wholesale markets sector. These reports replace portfolio letters and will now be published annually.

To read the Regulatory Priorities report, please click here.

Relevant case law updates

Court of Appeal confirms a claim is 'brought' for limitation purposes even if wrong issue fee is paid

In the case of Siniakovich v Hassan-Soudey and others [2026] EWCA Civ 215, the Court of Appeal has confirmed that paying the wrong issue fee does not prevent a claim being 'brought' for limitation purposes. 

The Court found that a claim is 'brought' under the Limitation Act 1980 when it is delivered to the court office, provided that a fee is proffered or paid (or 'help with fees' sought). In doing so the Court confirmed the question of when a claim is brought for limitation purposes is a matter of substance not form. The ruling does not mean that claimants can deliberately underpay court fees – if a claim has been deliberately undervalued to avoid paying a larger court fee, the court can apply sanctions and could strike out the claim. 

This is clearly helpful to claimants, particularly where mistakes may arise out of uncertainty as to the value of the claim. On the other hand, this could be unhelpful to defendants and their insurers if a claimant looks to take advantage of such uncertainty in order to pay a lower court fee without consequence. 

To read the judgment please click here. 

High Court provides guidance on summary judgments and further case management directions

In the case of Manek v Sintl Ventures Ltd [2026] EWHC 600 (ch), the High Court gave guidance on filing a defence where summary judgment is sought but only in relation to part of the claim. 

CPR24.4(4) provides that where a summary judgment is sought before a defence has been filed, the defendant need not file a defence before the hearing of the summary judgment application. In this case, it was the Claimant's position that as the Defendants had not filed a defence prior to the summary judgment application (as they were not required to), following the summary judgment application, the Claimant could then seek judgment in default on the balance of the claim. 

His Honor Judge Hodge KC, did not agree and went on to consider the overriding objective and concluded that the answer was provided for in CPR 24.6(a). CPR 24.6(a) provides what when a court dismisses a summary judgment application, it may give directions as to the filing and service of a defence. This is further supported by the White Book commentary which directs the court to give case management directions. 

The judgment is helpful for both claimants and defendants in understanding the procedural requirements where a summary judgment is sought at least in part, and a defence on the remaining part of the claim is likely to follow. It will allow for a more focused defence to be filed (subject to the outcome of the summary judgment application) with active case management moving forward. 

To read the Judgment, please click here.

With thanks to this week's contributors:  James Parsons, Alison Thomas, Heather Buttifant, Ben Simmonds, Kerone Thomas, Rebekah Bayliss, Brendan Marrinan