The Financial Ombudsman Service received 40 per cent more complaints in the first six months of the year than originally forecast.

The figure is contained in its plans and budget consultation published yesterday, which revealed how it is managing coronavirus.

The standout message is the tension between easing the regulatory burden on firms that pay its levy while remaining adequately funded.

In March, it introduced revised funding arrangements for its 2020/21 budget due to Covid-19.

The ombudsman froze all minimum levies at 2019/20 levels and said it would absorb the cost of these changes using reserves.

It budgeted to end 2020/21 with a deficit of £53m but the latest forecasts show a deficit of £43m.

Other positive news is FOS resolved around 93 per cent of the complaints expected in general casework during the first half of 2020/21.

Over the year it has also seen 400 new investigators join the service who are going through its academy programme.

Despite pandemic pressures FOS proposes to maintain the freeze on the minimum levy and retain the free case allowance.

It has considered possible scenarios for complaint volumes in 2021/22 – ranging from 150,000 up to 200,000 new cases.

The ombudsman’s expected cost base will be £252m while the compulsory jurisdiction levy will be between £84m and £106m subject to feedback.

The consultation deadline for responses is 31 January 2021 with final plans and budget expected to be published by 31 March 2021.

FOS chief executive Caroline Wayman says: “In these incredibly difficult times, it’s essential our plans are as informed as possible – so we’re equipped to play our part in helping consumers and businesses navigate the questions of fairness ahead, recognising the uncertainties involved and flexibility this will require of us.

“We’ve already begun conversations with the FCA, businesses and consumer organisations about our plans. These conversations, and the responses to this consultation, will help us further refine our forecasts and approach before we publish our final plans and budget in March 2021.”