TL;DR: The FCA motor finance redress scheme (PS26/3) covers roughly 12.1 million PCP and HP agreements taken between 6 April 2007 and 1 November 2024. The complaints handling pause lifts on 31 May 2026. The scheme itself starts 30 June 2026 for agreements from 1 April 2014 onward, and 31 August 2026 for older ones. After the 1 May 2026 legal challenge by lenders and Consumer Voice, the FCA confirmed on 8 May 2026 that firms must continue preparing. Average payout: about £830. You can complain free, direct to your lender. Claims firms can take up to 36% of any payout.
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What the FCA motor finance redress scheme actually does
Policy Statement PS26/3, published by the Financial Conduct Authority on 30 March 2026, sets up an industry wide redress scheme for motor finance customers who were treated unfairly between 6 April 2007 and 1 November 2024. The scheme covers credit agreements for cars, vans and motorbikes where lenders failed to disclose, or paid excessive, commission to brokers and dealers, including the discretionary commission arrangements (DCAs) at the heart of the Supreme Court ruling. The FCA expects to put about £7.5 billion back into consumers’ pockets, with an average payout near £830 per eligible agreement and roughly 12.1 million agreements in scope. That is about 37% of all motor finance written across the 17 year window. Compensation is paid as the unfair commission element back, plus interest at the Bank of England base rate plus 1%, with a 3% floor. The FCA’s own consumer page is blunt about one thing: “you don’t need to use a claims management company or law firm to take part in our scheme.” Source: FCA: Car finance complaints.
The May 2026 legal challenge: where it leaves UK drivers today
On 1 May 2026, the FCA confirmed that its compensation scheme had been legally challenged. Four challenges are now live: three from lenders (CA Auto Finance, Mercedes Benz Financial Services and Volkswagen Financial Services) and one from a consumer advocacy body, Consumer Voice, which argues payouts should be higher. On 8 May 2026 the FCA told firms to keep preparing as if the scheme will run, in particular to keep identifying affected customers and to “support those who have signed up to multiple claims firms for the same complaint.” Hearings are not expected before October 2026, and lenders have been told to plan for a decision around mid November 2026. In practical terms, the scheme is not paused. It is on track to begin on 30 June 2026 for newer agreements, with the regulator defending it in court while firms keep working through customer files. Coverage from MoneySavingExpert confirms the FCA’s view that delays from the litigation are likely but the scheme remains the central route to compensation.
31 May 2026: complaints handling pause lifts
The single most important date for drivers is 31 May 2026. From that day, the complaints handling pause lifts. Lenders must again issue final responses to motor finance commission complaints, and the standard eight week response clock starts running for complaints that fall outside the scheme. The FCA brought this date forward from the originally proposed 31 July 2026 specifically to get money moving faster. If you have already complained and your case has been sitting in limbo for months, you should expect either a final response, an offer, or written confirmation that your complaint will be handled inside the redress scheme. Motor leasing complaints are a separate carve out: firms have had to issue final responses on those since 5 December 2025. If your PCP or HP was taken out between April 2007 and November 2024, the cleanest move before 31 May is to put a written complaint in to your lender now, even if you are not yet sure whether you had a discretionary commission arrangement. The lender has the data; you do not. For the CDE step by step playbook on lodging the complaint, see our earlier guide to the FCA motor finance complaints pause and our explainer on PCP vs HP UK 2026.
30 June 2026 and 31 August 2026: the two scheme start dates
The FCA has split the scheme into two cohorts based on when your agreement started. If you took out the loan from 1 April 2014 onwards, your file goes through the scheme from 30 June 2026. If you took out the loan between 6 April 2007 and 31 March 2014, you wait a little longer: that cohort starts on 31 August 2026. Lenders then have six months from their cohort’s start date to contact every eligible customer with a redress decision. If you complain proactively before being contacted, you generally move up the queue and may be paid faster. The split is in the FCA’s PS26/3 final policy and the consumer summary at fca.org.uk/consumers/car-finance-complaints. Two clarifications worth holding in your head: the scheme covers cars, vans and motorbikes financed through PCP or HP (regulated motor leasing complaints have their own complaints track). And the £830 figure is an average, not a cap. Larger commissions, longer terms and higher interest rates all push individual payouts well above that.
Claims firms: the 25% to 36% problem
The Solicitors Regulation Authority and the FCA have set up a joint taskforce on poor practice in motor finance claims, with the SRA already running 89 open investigations into 71 law firms handling these claims at 31 January 2026. The FCA, in its own words via consumer finance director Alison Walters, has been clear: “Our scheme will be free and people don’t need to use a CMC or law firm.” Most claims management companies and motor finance claims firms charge fees of 25% to 36% of the gross payout. On the average £830 award that is between £207 and £299 lost to fees for paperwork the lender will, by 31 May 2026, be legally required to process for free. The cleanest path for most people is a written complaint direct to the lender, then escalation to the Financial Ombudsman Service (also free) if you are unhappy with the outcome. For an independent view on the claims firm trap, MoneyHelper publishes a free guide on complaints that translates straight across to motor finance.
Solicitor view: what an SRA-regulated specialist is telling clients
Coby Benson, a consumer rights solicitor at Bott and Co Solicitors in Wilmslow (SRA number 490167; firm SRA 605593), has written publicly about the scheme since its publication. On the redress design, Benson said: “It’s deeply unfair that people who have wrongfully paid very high commission without even realising it, yet miss out on compensation simply because it represents less than 35% of their interest” (Bott and Co, 25 February 2026). On the legal challenge, the firm’s own update of 5 May 2026 confirms it expects compensation to still begin to be paid in 2026, with the FCA providing further guidance, and that “for consumers who have instructed Bott and Co to handle their claim, their claim remains registered and the firm will continue progressing matters on their behalf as the situation develops.” Benson’s wider point in his 1 April 2026 commentary, that the burden on individuals to navigate complex claims alone “makes independent legal representation more important than ever,” is a fair counterpoint to the FCA’s free scheme line: most people will not need a solicitor, but if your case is high value, contested, or involves multiple agreements, a regulated UK solicitor (not a claims management company) can be worth the fee. Verify any firm at sra.org.uk/solicitors/search before instructing.
Our take
The FCA motor finance redress scheme is the single biggest UK consumer credit redress event since PPI, and the May 2026 legal challenge does not change the basic playbook. The 31 May 2026 pause lift gives drivers the right to a substantive response, the 30 June 2026 scheme start date triggers six months of proactive lender outreach for post 2014 agreements, and the FCA is on record that this works without a paid claims firm. If you had PCP or HP on a car, van or motorbike at any point between 6 April 2007 and 1 November 2024, lodge a written complaint with your lender now, keep the paper trail, and refuse to sign up to multiple claims firms for the same complaint. If the lender’s final response is poor, the Financial Ombudsman is free. The scheme will move slower than the FCA originally hoped because of litigation, but it is the cheapest route to your money. For more on UK auto finance and ownership cost, see our UK GAP insurance update and our explainer on company car tax 2026/27.
Do I have to wait until 30 June 2026 to claim under the FCA motor finance redress scheme?
No. You can lodge a written complaint with your lender right now. From 31 May 2026 lenders must again issue final responses on motor finance commission complaints. Complaining early often means you are paid sooner than waiting for the lender to contact you in the scheme’s six month outreach window after 30 June 2026.
Will the May 2026 legal challenge stop me getting paid?
The FCA confirmed on 8 May 2026 that firms must continue preparing. Hearings are not expected before October 2026 and lenders have been told to plan for a mid November 2026 decision. The scheme is on track to start 30 June 2026 for agreements from 1 April 2014, with delays possible in payment timing but not in eligibility.
How much can a claims management company charge?
Claims management companies and some law firms charge fees of 25% to 36% of any compensation. On the FCA’s average £830 payout that is £207 to £299. The FCA scheme is free to use direct, and the Financial Ombudsman Service is free for escalation, so most consumers should not need a paid representative.
Which agreements are eligible for redress?
Regulated motor finance agreements (PCP and HP) on cars, vans and motorbikes taken out by consumers between 6 April 2007 and 1 November 2024, where the lender failed to disclose, or paid excessive, commission to the broker or dealer. Regulated motor leasing complaints follow a separate complaints track.
Related reading on CDE
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Where to check next
Use this as the final check before paying a deposit, signing finance paperwork or relying on a headline monthly figure.
