FSCS protects your money up to £85,000for all banks, building societies and credit unions that are authorised by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Eligibility criteria apply, but we generally protect individuals and most businesses.
If you can't find your bank, building society or credit union using the protection checker, FSCS might not protect your money. Results are based on the FCA’sfinancial services register, which you can search yourself to check if your firm is authorised.
Some types of firm may be authorised and appear on the financial services register, but if they are not a bank, building society or credit union, FSCS can’t protect money you hold with them if they fail. For example, we can’t protect you if an e-money firm or payment services firm fails. You can check if your firm is an e-money firm or payment services firm by searching thefinancial services register.
As an expert in financial regulations and consumer protection, I bring a wealth of knowledge to guide you through the intricacies of the Financial Services Compensation Scheme (FSCS). My comprehensive understanding of the regulatory landscape, specifically the roles played by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), allows me to navigate the nuances of financial protection schemes with confidence.
Now, let's delve into the key concepts outlined in the article regarding the FSCS and how it safeguards your money:
1. FSCS Coverage:
The Financial Services Compensation Scheme (FSCS) serves as a safety net for individuals and most businesses by protecting their money in banks, building societies, and credit unions. The coverage extends up to £85,000 per individual, providing a financial cushion in case of the institution's failure.
2. Regulatory Authorization:
Authorized entities are the focal point of FSCS protection. Banks, building societies, and credit unions must be authorized by both the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to be eligible for coverage. This dual authorization ensures a rigorous oversight process, assuring consumers of the institutions' financial stability.
3. Eligibility Criteria:
While FSCS generally protects individuals and most businesses, there are eligibility criteria that must be met. It's crucial for consumers to understand these criteria to ascertain their coverage and ensure their financial security.
4. Protection Checker:
Consumers are encouraged to use the FSCS protection checker to verify whether their bank, building society, or credit union is covered. This tool relies on information from the FCA's financial services register, which is a comprehensive database of authorized firms.
5. Limitations of Coverage:
FSCS protection has limitations. Not all types of firms are covered, even if they are authorized and appear on the financial services register. For instance, e-money firms or payment services firms are excluded from FSCS coverage. It's imperative for individuals to be aware of these limitations and assess their exposure accordingly.
6. Self-Verification:
Consumers are empowered to independently verify the authorization status of their financial institution by searching the financial services register. This proactive approach ensures transparency and allows individuals to confirm their level of protection.
7. E-money and Payment Services Firms:
The article highlights a specific exclusion – FSCS cannot protect money held with e-money firms or payment services firms in the event of their failure. Individuals are advised to identify the nature of their financial institution and assess whether FSCS coverage applies.
In conclusion, understanding the regulatory landscape, eligibility criteria, and limitations of coverage is paramount for consumers seeking to safeguard their financial assets. The FSCS provides a valuable safety net, but informed decision-making is essential to ensure financial resilience.
