Britain’s scheme for compensating consumers hit by financial company failures has set itself a billion-pound budget for the coming year to cope with a likely surge in collapses due to Covid-19, Reuters reports.

The Financial Services Compensation Scheme’s (FSCS) budget of 1.04bn pounds for the 2021/22 financial year that starts in April is its highest in six years. The FSCS also said it would add 78 million pounds to the current year’s budget — a lower than expected increase — due to more firms failing, pushing the total for 2020/21 to 700m pounds.

The body is responsible for compensation arrangements for the Financial Conduct Authority, which warned this month that around 4,000 financial firms in Britain were at “heightened risk” of collapsing due to fallout from the pandemic.