The Financial Conduct Authority released new complaints data on Tuesday, revealing that Lloyds Banking Group was the most complained about financial services group in the second half of 2025. The industry paid out nearly a quarter of a billion pounds to dissatisfied customers.
Lloyds leads the pack
Across its subsidiaries, the FTSE 100 giant was hit with 187,516 grievances to the UK's financial watchdog in the final six months of the year. Its flagship brand Lloyds Bank registered the lion's share at 90,837, while its Edinburgh-based commercial lender Bank of Scotland clocked up 79,508. The group serves around 28 million UK customers, making it the country's largest financial services provider.
Santander came in second at 124,919 complaints. The bank boasts around 14 million UK customers.
Industry-wide trends
On a headline level, the financial services sector saw only a modest uplift in complaints, reaching 1.9 million, up just shy of one per cent from the first half. This remains broadly in line with the multi-year trend of floating between 1.7 million and 2 million since early 2021.
Fewer complaints were upheld, with the portion of cases where the firm was found to be in the wrong dropping from 57.9 per cent to 55.5 per cent. Firms paid a total of £236.2 million in the period, a drop from £283.7 million paid in the first half of 2025. The average payout also dropped to £215 from £238.
Insurance complaints soar
Santander and Lloyds have become the most prolific cutters to their branch network, in moves which have sparked backlash from customers. In the last two years, Lloyds has shuttered nearly 500 sites, according to analysis from Lightyear, and in January laid out plans to close another 44.
Both Santander and Lloyds are among the firms with the most exposure to the motor finance scandal, which has caused a mountain of complaints for UK lenders in the last two years. Lloyds has set aside £2 billion for the car mis-selling saga, which relates to the use of 'secret' commission deals inked between car dealers and lenders. Santander is on the hook for £461 million.
The Financial Conduct Authority had placed a cap on car finance complaints, which is set to be lifted on 31 May 2026. The pause has been in place since January 2024, when complaints volumes rocketed as concerns around the use of discretionary commission arrangements – 'secret' deals between car brokers and banks – emerged.
Motor and transport insurance spike
Complaints regarding motor and transport insurance saw the most dramatic spike in the period, surging by over a third to 340,000. This helped fuel a 10 per cent jump in insurance and protection complaints to 790,329.
Current accounts grievances still topped the list, though decreased to 492,149 from 541,493 in the first half.
