This paper presents the preparation and characterisation of a new type of soft magnetic composites that are prepared from long Fe fibres instead of ferromagnetic particles. The Fe fibres were coated with a polymeric layer and compacted in toroidal shapes. The influence of polymer content and compaction pressure on the AC and DC magnetic properties of the compacts was investigated. The AC magnetic properties of the compacts were determined in the frequency range from 50 to 10 kHz at the flux densities of 0.1 T. It was found that 1 wt% of polymer ensures proper insulation of the fibres, hindering the development of eddy currents. Also, in order to have good magnetic properties, the compaction pressure should not be lower than 600 MPa. The comparison between the fibre-based soft magnetic composite and powder-based soft magnetic composite evidenced the superior magnetic properties of this new class of composites. For example, in the frequency range of 50 Hz-10 kHz, the initial relative permeability of the fibre-based compact is two times larger than the initial relative permeability of the powder-based compacts.