Income protection (IP) complaints made to insurers, advisers and other firms continued to soar in 2025 – the second consecutive year of a significant rise, according to latest data from the Financial Conduct Authority (FCA).
However, there was a significant decline in the number of complaints about private medical insurance (PMI) while grievances about term assurance, whole of life and critical illness were in line with the previous year.
Income protection complaints soar
According to its complaints data for 2025, the regulator received 9,806 complaints about income protection and other accident, sickness and unemployment.
This was up by 1,170 or 13.5% from 8,636 in 2024, which itself was up almost 16% from 7,457 in the previous year.
Overall, IP complaints have risen by 2,349 or 31.5% in the last two years – which has been tied-in with a notable growth in IP product sales.
This was reflected in the rate of complaints of 1.5 per 1,000 products held being largely on par with the previous three half-year periods.
More encouragingly, when it came to the whole of life/term assurance and critical illness category, there was little change with complaints marginally up from 48,298 to 48,905 in 2025.
This product set was also in line with the last two years at 0.9 complaints per 1,000 policies in force.
PMI complaints down
However, there was better news on PMI.
While total complaints received by firms for PMI and health insurance products had risen to 172,961 in 2024 from 165,609 in 2023, the 2025 data indicated a decline to 146,827 grievances.
This drop of 26,134 or 15% reflected three consecutive half-years of falls.
Having been the second most complained about product in financial services in the first half of 2024 with 9.9 complaints per 1,000 in force policies, the figure has since fallen three times to sit at 6.5 in the second half of last year.
This is despite PMI sales continuing to rise across the period.
‘Sharp rise’ in insurance complaints
Overall, in the second half of 2025 financial services firms received 1.87 million complaints, a 0.9% increase from 1.85 million in the previous six months, the FCA noted.
Since the first half of 2021, complaints have stayed relatively constant between 1.7 million and two million, it added.
Insurance and pure protection complaints increased 10.1% from 717,523 in H1 2025 to 790,329 in H2 2025, the only sector to see an increase, however this was almost entirely due to the motor and transport sector which witnessed an 85,000 increase.
Phil Smith, head of redress at Broadstone, said: “Complaints across the financial services sector increased slightly in the second half of 2025 but remain well within their historic range.
“Any rise in consumer dissatisfaction is cause for concern, especially given the intense regulatory focus and scrutiny on treating customers fairly,” he continued.
“The sharp rise in insurance and pure protection complaints is particularly notable and may reflect a combination of increased product uptake, issues with certain products, heightened consumer expectations and a greater willingness among customers to challenge outcomes.
Though Smith added the sharp fall in the value of redress to financial services firms could indicate a reduction in the severity of issues being escalated, or that firms are resolving higher-value complaints earlier in the process before they crystallise into formal redress.
“Firms will be focusing on identifying root causes of complaints, improving front-end customer experience and using complaints data more effectively as a strategic tool to deliver better outcomes and reduce future risk, supported by earlier intervention and clearer customer communications,” he concluded.
