The Financial Ombudsman Service has confirmed its budget for 2012/13 will be £191.1m.

The figures come following a consultation paper on the topic which was released in January.

This is up by £88.2m on the 2011/12 budget which was £102.9m.

FOS said the increase was due to the increase in PPI cases which involve ‘significant upfront costs’ including recruiting large numbers of staff to manage the complaints.

However, the FOS has been able to freeze the fees for the case fee at £500 and the total levy at £19.7m.

But it said it was likely this would be the final year the rates could be frozen due to inflationary and operational pressures.

Case fees are currently only payable after the third case received for that firm but the FOS is proposing to change the figure to 25 complaints for the majority of businesses.

This would mean only one per cent of business would ever need to pay a case fee.

It is also consulting on developing a group-account arrangement for the 10 financial services firms which make up more than 75 per cent of complaints received.

However, it has added a fee of £350 per case for firms who receive more than 25 complaints relating to PPI which will come into force in April.

As the volume of claims is likely to fluctuate, it said it would this review the decision again in 2013/14.

For the coming year, the FOS says it expects to answer 1.4m enquiries, take on 285,000 new cases and settle 130,000 PPI cases.