SRA Fees 2026/27, the Compensation Fund and PII: Law Firms’ October Bill

What the SRA is charging for 2026/27

The Solicitors Regulation Authority’s fee policy for 2026/27 sets the individual practising certificate fee at £382, which includes a £48 administration fee, plus a compensation fund contribution of £170: £552 in total for each solicitor. Firms pay a periodic fee calculated from turnover. The SRA’s own worked examples put that at £1,151 for a firm turning over £200,000 and £4,271 for a firm turning over £800,000. Firms that held or received client money between 1 November 2025 and 31 October 2026 also pay £2,170 into the compensation fund. Renewals and payments are due between 1 and 31 October (SRA: current fees).

The Legal Services Board approved the practising fees in full on 2 September 2026. Its decision notice records the individual fee rising by £56, or 17%, and total practising fee income projected at £178.1m, up from £148.4m, with about 60% coming from firms (LSB decision notice). The compensation fund contributions are dealt with separately, and the SRA’s fee page notes they are subject to Legal Services Board approval.

Why the compensation fund contribution has risen

The compensation fund pays clients who lose money through a solicitor’s dishonesty or a firm’s failure to account for client money. Legal Futures reported on 16 July 2026 that the individual contribution rises from £70 to £170, and the firm contribution from £1,950 to £2,170. The SRA first consulted on an even split, which would have meant £120 for individuals and £3,600 for firms, before moving 70% of the burden onto individuals after concern about the effect on smaller firms. The SRA says firms with 29 or fewer solicitors will pay less into the fund overall in 2026/27 as a result.

The pressure on the fund is well documented. The Law Society Gazette reports total contributions of £46.3m this year against £26m last year, and a previous high of £31.6m in 2024/25, the year thousands of claims were made by clients of the collapsed firm Axiom Ince. The Gazette also reports claims linked to PM Law estimated at £20m as of April 2026. For most firms the lesson is simple: regulatory costs are no longer a stable line in the budget.

PII: the other October renewal

Professional indemnity insurance adds to the same peak. Lockton’s 2026 market report, covered by Legal Futures in July, found that 46% of firms renew in October and 21% in April. The broader picture is more encouraging than in recent years: Lockton describes capacity as exceeding demand and “a favourable environment for buyers”, and says more than a quarter of firms secured longer-term policies, typically 18 months, in the past year.

Even in a softer market, the premium is usually one of a law firm’s largest annual costs, and insurers normally want it settled at the start of the policy. PII premium finance spreads it into monthly payments over the policy term, which keeps cash available for salaries, disbursements and tax. Our guide to PII premium finance explains how lenders assess it, and our guide to solicitors’ run-off cover covers the position on closure or merger.

Putting the October numbers together

For a firm with ten solicitors, practising certificates and individual compensation fund contributions alone come to £5,520 before the firm’s periodic fee, its own £2,170 contribution and any PII premium. These costs arrive in the same few weeks, while work in progress and unpaid bills are still tying up the cash that would ordinarily meet them.

There are three practical ways to soften the peak:

• Spread the regulatory fees. Practising certificate finance covers certificates, compensation fund contributions and professional subscriptions over the year.
• Spread the premium. PII premium finance turns the renewal into monthly payments.
• Release cash from the cash cycle. Aged debt and lock-up finance or WIP funding for law firms can bring forward cash already earned.

Finance of £25,000 or less for sole traders and small partnerships can be regulated consumer credit. We’ll tell you at the outset if that applies to your firm, and our guide to consumer credit and practice finance explains why it matters.

Planning for 2027 now

The SRA has been clear that its costs are rising. The Gazette reports that its budget grows by 29% to £111.5m for 2026/27 to fund an overhaul of the organisation, and the compensation fund’s position depends on claims the profession cannot control. Firms that budget for October as a single annual event, with funding lined up in advance, tend to handle it with far less strain.

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Common questions

Published 17 October 2026. Figures and dates are taken from the sources named and were correct on that date. This article is for general information only and should not be treated as legal, tax, accounting or financial advice. Funding availability and lender requirements depend on individual circumstances.