“We are disappointed that the FOS has decided to implement the proposals it consulted on earlier this year, despite the feedback it has received.

“For some time, we have been talking about the financial pressure our members are under from the current fee structure of the FOS.

“The free threshold has been reduced from 25 to just three cases. This will mean that around 20 per cent more firms will now have to pay case fees, which will disproportionately affect smaller businesses. That alone represents a cost of over £16,000 to a firm with 25 cases.

“Today’s publication also means a large rise in the compulsory jurisdiction levy paid by firms will go ahead.

“There remains little explanation of why the organisation’s cost base will rise by over £40 million for the coming year and is an example of the wider concerns we have had about the financial model of the FOS in recent years.

“We need to look in more detail at how the FOS will be sustainably funded in the future. We will be discussing this with the FOS in the coming weeks to outline the industry’s position. We need to ensure the organisation delivers value for money for consumers and firms alike.”