Lloyds Banking Group has cemented its position as the most complained-about name in Britain’s financial services sector, racking up more complaints to the City regulator than any other lender in the second half of 2025, as the entire sector returned almost a quarter of a billion pounds to angry customers.
New figures from the Financial Conduct Authority show the FTSE 100 banking giant made a whopping 187,516 complaints about its subsidiaries between July and December last year. The black horse brand itself bore the brunt with 90,837, while its Edinburgh-based trading arm Bank of Scotland was not far behind with 79,508.
The scale of the numbers partly reflects the sheer presence of the group, which has around 28 million customers and remains the country’s largest financial services provider. Santander, which serves around 14 million Brits, came a distant second with 124,919 complaints.
Despite the striking numbers at the top of the table, the overall picture is one of relative stagnation. The total number of complaints across the industry rose slightly to 1.9 million, an increase of just under one percent compared to the first half of the year and largely in line with the trend that has prevailed since the beginning of 2021, when the numbers fluctuated between 1.7 million and 2 million.
However, there was also some good news for the industry. The proportion of complaints upheld in favor of the customer fell from 57.9 per cent to 55.5 per cent, while the total bill for redress fell to £236.2 million, a significant decrease from £283.7 million in the first half of 2025. The average payout also fell from £238 to £215.
The results come at a sensitive time for retailers as both Lloyds and Santander come under fire from consumer groups over the pace at which they are reducing their store footprints. Analysis from Lightyear shows the Spanish lender has closed nearly 500 locations over the past two years and announced another 44 closures in January, fueling accusations that vulnerable customers are being left behind.
Behind the headlines lies the car finance mis-selling scandal which continues to cast a long shadow over UK lenders. Lloyds has set aside £2bn to cover potential compensation related to so-called secret commission arrangements between car dealers and banks, while Santander has earmarked £461m. Both are among the most exposed names in the industry.
The FCA’s pause on car finance complaints, which has been in place since January 2024 after volumes soared due to concerns over discretionary commission arrangements, is set to be lifted on May 31, 2026, raising the prospect of a new wave of complaints landing on lenders’ desks this summer.
Otherwise, motor and transport insurance proved to be the biggest weak point in the reporting period, with complaints increasing by more than a third to 340,000. This increase helped the total number of insurance and protection complaints rise by 10 percent to 790,329. Current accounts remained the largest single category, although volume fell to 492,149 from 541,493 in the first half of the year.
For Britain’s biggest banks, the latest data offers little immediate relief. With the motor vehicle finance bill still outstanding and branch closures continuing to create political pressure, pressure on customer service teams is likely to remain significantly increased through 2026.
