The Financial Ombudsman Just Changed: What the 10-Year Limit Means for You

On 16 March 2026, the government announced the most significant reforms to the Financial Ombudsman Service (FOS) since it was created in 2001. The changes include a new 10-year absolute time limit on complaints, a revised "fair and reasonable" test, and a new referral mechanism between the FOS and FCA. If you're planning to complain about a bank, insurer, or financial firm, here's what the reforms mean for you.

What Is the Financial Ombudsman Service?

The FOS is the free, independent service that resolves disputes between consumers and financial companies. If your bank, insurer, mortgage lender, or investment firm treats you unfairly and won't put it right, the FOS can investigate and order the firm to pay compensation.

It handles everything from unfair bank charges and rejected insurance claims to mortgage disputes and investment mis-selling. Last year, it received over 190,000 new complaints.

The Big Change: A 10-Year Time Limit

What's New

The government is introducing a 10-year absolute time limit for bringing complaints to the FOS. This means you cannot complain to the FOS about something that happened more than 10 years ago, regardless of when you became aware of the problem.

What Existed Before

Previously, the rules were more complex:

• You had 6 years from the event, OR
• 3 years from when you first knew (or should have known) about the problem
• But there was no absolute cap - some complaints about very old issues could still be brought if the consumer only recently became aware

What This Means Practically

If you've been thinking about complaining about something from more than 10 years ago (an old insurance policy, a questionable investment, or historic bank charges), the window is closing. Once the legislation passes, any event older than 10 years will be outside the FOS's jurisdiction.

However: The FCA will have the power to make exceptions to the 10-year limit in certain circumstances. The details of when exceptions will apply haven't been finalised yet.

The "Fair and Reasonable" Test Changes

This is the more subtle but potentially significant change.

How It Works Now

The FOS currently decides cases based on what is "fair and reasonable in all the circumstances." This gives ombudsmen wide discretion. Sometimes, the FOS has ruled against firms even when those firms technically followed the FCA's rules, because the FOS decided the outcome still wasn't fair.

What's Changing

The reformed test will mean that where a firm has met its FCA obligations, it must be considered to have acted fairly and reasonably. In other words, if the firm followed the rules, the FOS can't second-guess that and find against them anyway.

What This Means for Consumers

For most complaints, this won't change much: firms that break FCA rules or treat customers unfairly will still be held to account. But for borderline cases where a firm technically followed the rules but the outcome felt unfair, it may be harder to get a ruling in your favour.

The FOS-FCA Referral Mechanism

What's New

When the FOS encounters a complaint that raises questions about ambiguous FCA rules, or where the issue has wider industry implications, it will now have to refer the matter to the FCA for guidance.

Why It Matters

This should lead to more consistent decisions. Previously, the FOS sometimes made rulings that effectively created new rules, which firms argued wasn't the FOS's job. The referral mechanism means the FCA (as the actual regulator) will clarify the rules, and the FOS will apply them.

Other Changes

Chief Ombudsman Oversight

The Chief Ombudsman will have overall responsibility for FOS determinations, aimed at improving consistency across cases. Currently, different ombudsmen can reach different conclusions on similar cases.

Thematic Reports

The FOS and FCA will publish joint thematic reports explaining how certain types of complaints will be assessed. This gives consumers (and firms) clearer expectations about likely outcomes.

What's NOT Changing

• The FOS remains independent - it won't become part of the FCA
• It remains free for consumers
• It can still order compensation - currently up to £430,000 per complaint
• Firms must still resolve complaints within 8 weeks or issue a deadlock letter

What You Should Do Now

If You Have an Old Complaint

Don't wait. If you've been putting off complaining about something that happened years ago, submit your complaint now, before the 10-year limit is legislated.

Check Your Eligibility

You can complain to the FOS if:

1. You've already complained to the firm and they haven't resolved it within 8 weeks, OR
2. The firm has sent you a final response (also known as a "deadlock letter") that you're unhappy with
3. Your complaint is within the time limits (currently 6 years from the event, or 3 years from awareness)

How to Complain

1. Complain to the firm first - always. Give them 8 weeks
2. If they don't resolve it, go to the FOS online at financial-ombudsman.org.uk
3. Provide evidence - bank statements, letters, emails, call recordings if you have them
4. Be specific about what went wrong and what you want as a resolution

The FOS is still your best free route to resolve financial disputes. The reforms tighten the rules, but the core service (holding financial companies to account) remains intact.