The bill for mis-sold payment protection insurance (PPI) at Barclays soared to £2 billion today as claims against the banking giant continue to pile up.

The embattled lender revealed a further £700 million hit after it set aside £1 billion to settle claims in 2011, and £300 million in the first quarter of 2012.

The higher charge comes after the Financial Ombudsman Service warned PPI complaints are on course to be more than double the 165,000 it had expected to receive this year.

The majority of Britain's banks unveiled larger PPI provisions earlier this year – but Barclays did not reveal a further charge.

Lloyds Banking Group has racked up a PPI compensation bill of £4.3 billion, HSBC has set aside £1.7 billion and Royal Bank of Scotland £1.3 billion.

In total, about £10 billion has been set aside by the banks to cover claims being made by people who were sold insurance they did not want or need.

But some consumer groups fear even this could not be enough to cover the scale of the problem.

PPI policies were meant to help people pay back their loans after a loss of income, but a widespread mis-selling scandal emerged, with some people finding they had taken out the insurance without realising it, or felt under pressure to do so.

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