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Understanding FSCS compensation
The Financial Services Compensation Scheme, or FSCS, is a UK protection scheme that can pay compensation if an authorised financial firm fails. It is designed to protect eligible customers when a bank, insurer, investment firm or other regulated business cannot return money owed to them.
FSCS cover does not apply to every financial product in the same way. The type of compensation available depends on the product, the firm involved, and whether the customer meets the eligibility rules.
Bank and building society products
One of the most common areas covered by FSCS is deposits held with banks and building societies. This includes current accounts, savings accounts, cash ISAs, notice accounts and fixed-term deposits.
For eligible deposits, FSCS protection typically covers up to £85,000 per person, per authorised firm. If a bank is part of a banking group, different brand names may still share the same protection limit.
Joint accounts are usually covered separately for each account holder. That means a joint balance may be protected up to £170,000 in total, provided the account qualifies.
Insurance products
FSCS can also cover certain insurance products if the insurer cannot meet its obligations. This may include motor insurance, home insurance, travel insurance, pet insurance and some life insurance policies.
Not every insurance claim is covered in the same way, and the rules can vary depending on the type of policy. In some cases, FSCS may help if a valid claim has been made but the insurer has gone into default.
There are different limits for insurance compensation, and some products may be protected in full. It is important to check the exact policy type and whether the insurer was authorised in the UK.
Investments and pensions
Investment products may also fall within FSCS protection if a regulated firm fails and customers lose money because of poor advice, mis-selling or firm default. This can include shares, bonds, investment funds, unit trusts and certain structured products.
FSCS may also cover pension advice or pension transfer advice where a regulated adviser has acted improperly and caused a loss. However, the underlying investment itself is not always protected simply because it was placed in a pension wrapper.
The compensation limits for investments are usually lower than deposit protection, and claims often depend on whether the customer received advice from a UK-authorised firm.
Loans, mortgages and other products
Some loan, credit and mortgage-related products may be covered too. This can include payment protection insurance claims, mortgage advice and certain debt management or credit broking services, if the firm was authorised and has failed.
FSCS can also apply to funeral plans, specific types of general insurance mediation, and some other regulated activities. The key question is whether the product was provided by a firm covered by the scheme.
If you are unsure, the safest approach is to check the firm’s status and the product type before making a claim. FSCS eligibility is based on both the product and the circumstances of the failure.
Frequently Asked Questions
FSCS compensation claim covered products are financial products or services that may be protected by the Financial Services Compensation Scheme if a UK-authorised firm fails and cannot meet its obligations. Coverage depends on the product type and the circumstances of the firm’s failure.
Common FSCS compensation claim covered products include bank deposits, certain insurance policies, investment products, pensions advice in some cases, mortgages in limited situations, and some financial services linked to authorised firms. Exact protection depends on the product and the firm involved.
The amount of compensation available for FSCS compensation claim covered products depends on the product category. For example, deposits are generally protected up to the applicable limit per person, per authorised firm, while investments and insurance claims may have different limits and rules.
Eligibility for FSCS compensation claim covered products usually depends on whether you held a protected product with a firm authorised by the relevant regulator and whether that firm has failed or cannot pay claims. Both individuals and some businesses may be eligible depending on the product type.
To check whether FSCS compensation claim covered products apply to your case, identify the firm name, the product you bought, and whether the firm was authorised. You can then compare the product against FSCS protection rules or contact FSCS directly for confirmation.
To make a claim for FSCS compensation claim covered products, you usually need to submit a claim through FSCS or follow the instructions provided after the firm’s failure is announced. You may need account details, policy documents, and proof of ownership or loss.
Documents for FSCS compensation claim covered products claims commonly include account statements, policy schedules, investment confirmations, correspondence with the firm, proof of identity, and any records showing how much money or value is involved.
The time needed for an FSCS compensation claim covered products claim varies by product type and case complexity. Simple deposit claims may be processed faster, while investment, pension, or insurance-related claims can take longer because more checks are needed.
Yes, bank deposits are among the most common FSCS compensation claim covered products, provided the bank or building society is covered and the account type is eligible. Protection normally applies up to the relevant deposit limit per person, per firm.
Some investment products are FSCS compensation claim covered products, but not all investments are protected. Coverage often depends on whether you were given regulated advice, whether the firm failed, and whether the product falls within FSCS rules.
Some pension-related matters can be FSCS compensation claim covered products, especially where there is regulated pension advice or administration linked to a failed authorised firm. The exact protection depends on the role of the firm and the nature of the complaint.
Yes, many insurance policies are FSCS compensation claim covered products if the insurer or intermediary is eligible and the policy falls within FSCS protection rules. Compensation may cover valid claims if the provider cannot meet its obligations.
Some mortgage-related services can be FSCS compensation claim covered products, usually in limited situations such as regulated mortgage advice or administration by an authorised firm. The mortgage itself is not always covered, so the specific issue matters.
No, FSCS compensation claim covered products do not protect all losses. Protection is limited to eligible products, eligible firms, and set compensation limits, and it may not cover losses caused by market movements, poor decisions, or non-covered products.
Yes, some businesses can claim for FSCS compensation claim covered products, especially for eligible deposits and certain other protected services. Eligibility depends on the type and size of the business and the product involved.
Yes, joint accounts can be FSCS compensation claim covered products if the account is eligible and held with a protected firm. Compensation is usually assessed per person, so each account holder may have their own protection limit.
If FSCS compensation claim covered products involve more than one firm, each firm is usually assessed separately for compensation purposes. Protection limits often apply per authorised firm, which may affect how much compensation is available.
Some overseas firms may be included in FSCS compensation claim covered products if they operate in the UK under the relevant regulatory rules and are covered by FSCS protections. However, many overseas firms are not covered, so the firm’s status must be checked.
Yes, FSCS compensation claim covered products can sometimes still be claimed after a firm has failed for some time, but there may be deadlines or claim windows. It is best to check with FSCS as soon as possible to avoid missing any time limits.
Official information about FSCS compensation claim covered products is available from the Financial Services Compensation Scheme and the relevant UK financial regulator. These sources provide details on coverage, limits, claim steps, and firm eligibility.
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