The Financial Ombudsman Service (FOS) handled a 44% increase in complaints during the 12 months to March.
In its annual review of the financial services industry, the FOS said the level of insurance-related complaints had risen by 40%. The number of motor insurance complaints had also risen, it said.
In 2002 the FOS handled 460,000 enquiries and 62,000 new complaints. It also managed to resolve 89% of complaints without resorting to its formal ombudsman powers to make binding decisions.
Chief ombudsman, Walter Merricks, said the figures masked a rift between consumers' expectations and firms' promises.
Merricks said: "The rift between expectation and reality can quickly open up if firms fail to deliver on these promises - leading to consumer dissatisfaction and complaints.
"The downturn in the financial markets is also a major factor in the rise in complaints. Consumers nursing losses - real or potential - are more likely to feel aggrieved than those who have realised gains.
"Firms' customer service and complaints-handling functions need to be resourced at a level that anticipates such trends and their likely impact on consumers."
