In the wake of the Supreme Court Johnson judgment and the FCA’s consultation on an industry wide motor finance redress scheme, there has been a number of public announcements by major motor finance companies of increases in their provisions to cover expected compensation pay outs.
Finance Company - Amount Set Aside & Provision Movement
Lloyds Banking Group (including Black Horse Limited) - Lloyds announced an additional £800m provision, bringing the total to an estimated £1.95bn.
Barclays PLC / Barclays Partner Finance - Barclays have re-assessed and increased its motor finance provision to £325m (previously £90m).
BMW Financial Services (UK) - BMW’s finance arm have now reported that a provision of around £200m will be set aside for potential motor finance redress.
Bank of Ireland Group - Bank of Ireland have published an update saying it may need to raise its UK motor finance provision to cover motor finance redress to a reported c.€400m.
Honda Finance Europe (UK division) - HFE have reported ring-fencing an estimated £62.2m.
Hyundai Capital UK - Hyundai Capital UK’s Companies House filings show a c.£34.5m provision for motor finance redress.
The big UK banks (Lloyds, Barclays) have made the largest incremental provisions and this reflects the FCA’s consultation setting out a relatively large industry exposure and the banks’ re-assessment of likely redress costs.
Captive lenders (BMW, Honda, Hyundai, Ford’s FCE earlier in 2025) have also started ring-fencing material sums. Captives are expected to bear a substantial share of the overall compensation bill.
Figures and timings are evolving quickly. Firms continue to update provisions as the FCA consultation crystalises its likely scope, remedy approach and timeline. More announcements are expected towards the end of 2025 and into Q1 of 2026 as the consultation closes and more firms finalise their estimates.
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