Educational, not advice. This article explains the Financial Ombudsman Service rule changes that take effect on 1 October 2026. It is general information, not personal financial or legal advice, and Savvy Investor Guide is not authorised or regulated by the Financial Conduct Authority. Nothing here says whether to complain, how to word one, or whether to accept an offer.
What this article covers: the new grounds on which the Financial Ombudsman can dismiss a complaint unexamined, which complaints they apply to, the one change to the “fair and reasonable” test, and what stays the same: cost, time limits and award limits.
What it does not cover: the wider argument over the fair and reasonable test, which is in our guide to the FOS reform, or the Financial Services and Markets Bill. United Kingdom only.
In short
- From 1 October 2026 the ombudsman has more grounds to dismiss a complaint without looking at its merits. The list is longer and more specific than today’s.
- The day your complaint reaches the ombudsman decides which rules apply. Not the day the problem happened, nor the day you complained to the firm.
- The new list includes a complaint with clearly no reasonable prospect of success, a fair offer from the firm that is still open, a signed full and final settlement, and a claim far above the award limit.
- One proposal was dropped after consultation. Any financial loss counts: the ombudsman cannot turn a complaint away because the financial loss was not “material”.
- The fair and reasonable test is clarified for every complaint, including ones already with the ombudsman: firms are judged by the rules and practice in force when they acted.
- Not changing: the service is free, the time limits are the same and the award limit for most complaints stays at £455,000. The planned registration stage does not start in October; the earliest date given is April 2027.
On 1 October 2026 the Financial Ombudsman Service starts working to a new set of rules, the first visible result of its joint review with the Financial Conduct Authority. That review ran a consultation in the spring, drew 92 responses and ended in a policy statement published on 11 August.
Most of the change concerns which complaints the ombudsman may decline to examine at all. That sounds like an internal matter. For anyone taking a complaint further this autumn it is the part that bites, because a complaint dismissed on these grounds is one where nobody at the ombudsman ever decides whether the firm got it right.
Why the rules are changing now
Since 9 July 2015 the ombudsman has worked under a rule shaped by the Alternative Dispute Resolution Regulations 2015, which narrowed the circumstances in which a complaint could be turned away unexamined. The version in force today, DISP 3.3.4A in the FCA Handbook, has five grounds. The complaint is frivolous or vexatious. A comparable dispute resolution body has dealt with it or is dealing with it. A court has decided it on the merits. It is in court now. Or dealing with it would “seriously impair the effective operation” of the service.
Those regulations were revoked on 6 April 2026, and the new rule, DISP 3.3.4C, swaps the short list for a longer and more specific one that looks a lot like the list the ombudsman used before 2015.
The date that decides which rules apply to you
The new grounds apply to “a complaint referred to the Financial Ombudsman Service on or after 1 October 2026”. Referring means sending the complaint to the ombudsman, which you can normally do once the firm has given its final response, or once its deadline has passed without one. The ombudsman gives firms 8 weeks for most complaints and 15 days for complaints about payment services, electronic money, fraud and scams.
A complaint already with the ombudsman on 30 September stays under the current rule, however long it then takes, because that rule covers every complaint referred from 9 July 2015 “but before 1 October 2026”. The date the problem happened is irrelevant here, and so is the date you first complained to the firm.
The Financial Ombudsman’s new dismissal grounds from 1 October 2026
Under DISP 3.3.4C the ombudsman may dismiss a complaint referred on or after 1 October without considering its merits if it considers that:
- the complaint is frivolous or vexatious;
- the complainant has acted “vexatiously, abusively or otherwise unreasonably” in dealing with the ombudsman itself;
- the firm has already reviewed the matter under the regulatory standards for that kind of review, or under formal FCA requirements for that type of complaint, including making any redress offer, unless the ombudsman thinks the firm did not address the particular circumstances of the case;
- the firm has issued a redress determination under a formal consumer redress scheme;
- the ombudsman has already considered or excluded the same matter, unless new evidence likely to change the outcome has since become available;
- a comparable complaints scheme, regulator, law enforcement body or dispute resolution process has dealt with it or is dealing with it;
- it has been through the courts in a way that makes an ombudsman review inappropriate, or it is in court now and the case has not been paused for the ombudsman, or it would be better suited to a court, arbitration or another scheme, or it is an employee’s employment complaint against the firm, or it is about investment performance, or it is about how a firm used a discretion under a will or private trust;
- it involves more than one eligible complainant and was sent without the others’ consent, where the ombudsman thinks it inappropriate to go ahead without it;
- there are “other compelling reasons” why the ombudsman should not deal with it.
Most of these existed in some form before 2015. The second did not: it is about how a complainant behaves towards the ombudsman, not about the complaint itself.
What “other compelling reasons” covers
The last ground is open-ended, so it comes with guidance, DISP 3.3.4D, listing examples. The list is not exhaustive. It includes a complainant who has not suffered, and is unlikely to suffer, financial loss, material distress or material inconvenience; a complaint that “clearly does not have any reasonable prospect of success”; a firm’s legitimate commercial judgment; and three that deserve a closer read.
An offer that is still open. Where the firm has offered compensation or a goodwill payment and the offer is still there to accept, the ombudsman may treat that as a reason to dismiss. The condition is that it considers the offer “fair and reasonable in relation to the circumstances alleged by the complainant”. An offer it thinks too low does not pass.
A full and final settlement. This example covers a complainant who has already concluded a full and final settlement with the firm “with knowledge of the right to refer a complaint” to the ombudsman. The knowledge condition is written into the wording.
A claim well above the award limit. The last example is where “the compensation sought under the complaint would significantly exceed the award limit”. The ombudsman can only order a firm to pay up to that limit, currently £455,000 for most complaints, so a claim far larger than that may belong in a court.
Neither the settlement example nor the award-limit example was in the pre-2015 list.
The word that was taken out
The consultation version would have let the ombudsman dismiss a complaint where there was no material financial loss. Respondents objected, and the final rule removes “material” in relation to financial loss. The ombudsman’s explanation was that it had been “persuaded that the concept of ‘material’ may have the potential to indirectly discriminate based on gender, ethnicity or disability. What is material to one consumer may not be to another.”
The practical effect, in the policy statement’s words: “there will need to be evidence that the complainant has not suffered any financial loss, material distress or material inconvenience.” Distress and inconvenience still have to be material. Financial loss does not.
What happens before a complaint is dismissed
The policy statement adds no new procedural rule here, but it does commit the ombudsman to a process: “Before exercising either power, we will provide clear notice of the steps required, a reasonable opportunity to respond and any appropriate adjustments to support participation in the process.” Where it asks for information it will normally set a deadline, “usually two weeks unless reasonable adjustments mean we provide longer”, and explain the consequences of not responding before any decision is taken.
It has also said it will report on how the new powers are used after their first year.
The one change that applies to every complaint
The ombudsman decides complaints on what is “fair and reasonable in all the circumstances of the case”, taking into account the law, regulators’ rules, codes of practice and good industry practice. From 1 October the rule, DISP 3.6.4R, says all of those are judged as they stood “at the time of the act or omission complained of”. A firm is measured against the standards that applied when it acted, not against ones written later.
This one does not depend on when you referred your complaint. The policy statement: “Although the rule change will take effect from 1 October 2026, it will apply to all current and future complaints given the change is clarificatory only.”
The consultation had also proposed removing “good industry practice” from the test. That did not happen. The ombudsman will keep it “at this stage” while the government’s Financial Services and Markets Bill goes through Parliament. The argument behind that is set out in our earlier explainer on the fair and reasonable test.
What is not changing at the Financial Ombudsman on 1 October
- It is still free for consumers. In the ombudsman’s words: “Our service is free for consumers. We’re funded by a combination of levies and case fees which are paid by respondent financial businesses and professional representatives.”
- The time limits are the same. You have 6 months from the date on the firm’s final response to bring the complaint to the ombudsman. The complaint to the firm itself usually has to be made within 6 years of the problem, or within 3 years of when you became aware, or could reasonably have become aware, that you had cause to complain.
- The award limits are the same as since April. For complaints referred on or after 1 April 2026 about something that happened on or after 1 April 2019, the limit is £455,000. For something that happened before 1 April 2019, it is £205,000.
- Claims firms still pay a fee. For complaints referred on or after 1 April 2025, the ombudsman charges professional representatives, such as claims management companies, a case fee of £260. It falls to £80 if the outcome is better for the client than the firm’s final response, or if the firm makes a new offer that the client accepts. What a representative charges you is a matter for your agreement with it.
And one thing that was expected but is not starting yet. The ombudsman plans a registration stage, a check that each complaint is within its scope and ready to investigate before a caseworker picks it up. The policy statement confirms it will go ahead but says “formal rules will follow alignment with our consultation on case fees”. Its equality impact assessment puts the registration change “from April 2027 at the earliest”.
Common questions
I sent my complaint to the ombudsman before 1 October. Do the new rules apply to it?
The new dismissal grounds do not. They apply only to complaints referred on or after 1 October 2026, and a complaint referred before then stays under the current rule however long it takes. The fair and reasonable clarification is different: the ombudsman says it applies to all current and future complaints.
Does the Financial Ombudsman still cost nothing to use?
Yes. It is free for consumers and is funded by levies and case fees paid by financial firms and by professional representatives such as claims management companies.
Can the ombudsman still look at a complaint about an investment that lost money?
One of the grounds for dismissal is a complaint “about investment performance”. That covers a complaint that an investment simply did badly. Complaints about how a product was sold, or about advice given, are not named in the list.
When will the registration stage start?
Not on 1 October. The ombudsman says formal rules will follow its consultation on case fees, and its equality impact assessment gives April 2027 as the earliest date.
Sources
- Financial Ombudsman Service, “Modernising the Redress System: policy statement”, August 2026 (PDF), including the legal instrument FOS 2026/6
- Financial Ombudsman Service, “Financial Ombudsman outlines next phase of service reforms”, 11 August 2026
- FCA, “CP26/9: Modernising the redress system”
- FCA Handbook, DISP 3.3, dismissal without consideration of the merits
- FCA Handbook, DISP 3.6, determination by the Ombudsman
- Financial Ombudsman Service, “Time limits”
- Financial Ombudsman Service, “Compensation”
- Financial Ombudsman Service, “Case fees”