Of those 206,121 new cases, 104,597 (51%) were PPI-related. The FOS says this is highest number of complaints it has ever received in a year about a single financial product.
PPI covers consumers against being unable to meet repayments due on credit products and loans. Last month, the High Court threw out a legal challenge to the way the Financial Services Authority and the FOS handle customer complaints about mis-sold PPI.
While the proceedings were ongoing, however, some banks started to issue standard letters telling customers they were unable to decide PPI complaints until the outcome of the court action. As a result, the number of PPI disputes referred to the FOS soared. By March 2011, the service was receiving up to 5000 new cases each week.
During the year, the FOS also saw a 27% increase in complaints relating to travel insurance and a 6% increase in disputes about motor policies. The number of complaints received about income protection, critical illness and private medical insurance, however, all fell - by 7%, 12% and 22% respectively.
Overall, the ombudsman resolved 164,899 cases - fewer than planned because of the PPI legal action. Of those resolved cases, 51% resulted in compensation for consumers.
One emerging trend noted in the report is that more cases are being taken "all the way" rather than being settled informally.
"During the year we have seen an increase in the number of cases where entrenched attitudes on both sides - and a refusal by either party to conciliate or compromise - has led to a significant rise in the number of cases being referred to an ombudsman for a final decision," the report states.
"This may reflect the tougher economic times - and the amount of money at stake for the consumer."
Despite the figures, FOS chief executive Natalie Ceeney found grounds for optimism in the fact that only around 700 travel insurance cases were received following the widespread disruption caused by the volcanic ash cloud in April and May 2010.
"An inevitable feature of life at the ombudsman service is that we see where things have gone wrong – but not usually where things have gone right," Ceeny comments in her foreword to the report.
"The widespread expectation had been that we would need to gear up to deal with thousands of ash-related travel-insurance disputes. But fortunately, these disputes never happened on that scale. Instead, the majority of travel insurers extended cover to their customers where travel policies may have been ambiguous – and sorted out problems quickly with their customers where they arose."