FSCS
The FSCS is the UK’s compensation fund of last resort for customers of authorised financial services firms. They may pay compensation if a firm is unable, or likely to be unable, to pay claims against it. This is usually because it has stopped trading or has been declared in default.
They are independent of the government and the financial industry and were set up under the Financial Services and Markets Act 2000, No charges are levied to individual consumers for using their service.
The FSCS covers business conducted by firms authorised by the Financial Services Authority (FSA). In addition, European firms (authorised by their home state regulator) that operate in the UK may also be covered.
Main protections and current limits
- Deposits: £85,000 per person per firm (for claims against firms declared in default from 31 December 2010) – 100% of £85,000.
- Investments: £50,000 per person per firm (for claims against firms declared in default from 1 January 2010) – 100% of the first £50,000.
- Home Finance (e.g. mortgage advice and arranging): £50,000 per person per firm (for claims against firms declared in default from 1 January 2010) - 100% of the first £50,000.
- Insurance Business (e.g. pensions and life assurance) – 90% of the claim with no upper limit. Compulsory insurance is protected in full.
- General insurance advice and arranging: unlimited (for business conducted on or after 14 January 2005) – 90% of the claim with no upper limit. Compulsory insurance is protected in full.
