In its annual corporate plan and budget, the Financial Ombudsman Service (FOS) has revealed plans to handle more complaints than ever before in the financial year to March 31 2015, in spite of its budget being cut by 20%.

The FOS is the independent body which adjudicates on financial services complaints when the customer and the firm are unable to reach agreement. In recent years it has struggled to handle massive numbers of complaints about mis-sold payment protection insurance (PPI), yet the organisation is expecting to resolve as many as 320,000 PPI cases in this 12 month period, which is expected to reduce their backlog from 400,000 to 270,000. 15% of the backlog of PPI cases are currently more than 18 months old, owing to the sheer volume of work in this area, and 2,000 new adjudicators have been taken on in recent years to try and improve this situation.

Despite the additional workload, most firms will not see any increase in the costs of using the FOS. Not only will the standard case fee remain unchanged at £550, but the supplementary fee of £350 for each PPI case will no longer be charged. Firms will continue to be exempt from paying case fees until they have had 25 cases referred to the FOS in the financial year, and there will be no increase in the funding levy. There will be a cost increase for the very largest firms though, as four more firms are brought into the ‘group-account charging arrangement’. At present, only the four largest banking groups pay this charge, and these groups are responsible for 60% of all complaints to the FOS.

At least there may be signs that the PPI saga has peaked. The FOS received 378,699 complaints about this product in 2012/13, and expects to receive 350,000 in 2013/14. Yet the predicted figure for 2014/15 is only 150,000 – of course the numbers of complaints received and the numbers resolved are very different amounts owing to the time it can take to complete the necessary investigations. Complaint numbers in other areas are expected to remain broadly similar to current levels, so in 2014/15, the FOS expects 64,000 complaints about banking (which includes current accounts), 32,000 about insurance other than PPI, 16,000 about investments and pensions and 8,000 about consumer credit.

Tony Boorman, interim chief executive and chief ombudsman at the FOS, said: “For the last few years our focus has been on building up our capacity to meet the unprecedented challenges of PPI. The investment we have made in scaling-up and developing our service is now paying off as we plan for another year of record activity, resolving twice as many PPI cases as we receive. But we’re not out of the PPI woods yet. While we expect the volumes of PPI complaints to decline, the numbers are still likely to be substantial. Our plans take this into account – but we will still be relying heavily on the patience of consumers and the cooperation of businesses before we will be able to draw a line under the PPI saga.”

The plan and budget is now subject to public consultation, and responses are invited by Monday February 17th.