In its latest annual report, it says 2008/9 was the first time the scheme started paying claims against brokers since  mortgage advice and arranging came under regulation in 2004.

It says it received 79 claims in the 12 months to 31 March, completing 54 of them. A quarter of decisions resulted in an offer of compensation with an average payout of just under £26,000.

"We expect to receive increasing volumes of claims against mortgage brokers in 2009/10," FSCS chief executive Loretta  Minghella says, adding the scheme is also expecting an increase in claims relating to payment protection insurance (PPI).

 

During the six months from the end of September 2008, the FSCS says it paid out more than £21bn in compensation. This  compares to just £1bn paid out since the scheme's inception in 2001 until late September last year.

The year was dominated by the failures of five banks - Bradford & Bingley, Landsbanki Islands (Icesave), Heritable Bank,  Kaupthing Singer & Friedlander and London Scottish Bank - and one building society, Dunfermline. The FSCS also dealt with two of the largest investment intermediary failures in recent years, Pacific Continental Securities (UK) and Square Mile Securities.

It paid some £21bn for the five bank defaults, about £18bn on its own behalf and the rest on behalf of HM Government and in respect of the liability of Iceland's Depositors' and Investors' Guarantee Fund.

Minghella says the FSCS is no nearer resolving how its levies for its different 'classes', including life and pensions and  investments, will be affected after it had to borrow funds from the Bank of England and HM Treasury to cover the bank  payouts.

While, for the first three years, only the deposit-taking classes will be hit, from 2012, any outstanding balance may have to  be repaid through increased levies spread across the other classes.

"We recognise the challenges for levy payers in dealing with this uncertainty and plan to work closely with HM Treasury with  a view to giving levy payers as much notice as possible about the likely impact on future levies," Minghella says.

Outside the banking collapses, the FSCS says 119 firms were declared in default and it paid over £92m in compensation  payments including almost £51m for general insurance claims, £17.5m for investment intermediation claims and £17.7m for life  and pensions intermediation claims.

Mortgage endowment claims received reduced to 3,820 claims, compared to 7,410 during the previous year, while claims in  respect of Pacific Continental Securities and Square Mile Securities were the biggest drivers of new investment claims at 

3,770.