If you have an investment (or you were advised to invest) and the provider or adviser has gone out of business, you may be able to claim compensation with FSCS. Whether you already have an investment or are thinking of investing, you should check that it’s FSCS protected.
Compensation limits
- If the firm failed after 1 Apr 2019 -up to £85,000per eligible person, per firm.
- If it failed between 1 Jan 2010 - 31 Mar 2019 -up to £50,000per eligible person, per firm.
- If it failed before 1 Jan 2010 -100% of the first £30,000 and 90% of the next £20,000 up to £48,000per eligible person, per firm.
Read the 'What you need to know' section below for compensation requirements.
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If you've got money to invest, there's never been such a range of investment ideas and products. But our protection varies depending on the type of product, and some investment products aren't protected at all. To be sure, check what we protect by using our investment protection checker.
Three steps to check FSCS investment protection
Whether you already have an investment or are thinking of investing, you should check whether it's FSCS protected.
Step 1
Check your provider is authorised by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA).
Step 2
Be aware that the particular activity (such as providing advice) that the authorised firm is carrying out for you must be regulated by the PRA or the FCA for FSCS protection to apply.
Step 3
Ask your firm to confirm that the activity they are carrying out for you is a regulated activity and FSCS protected.
Know the risks before you invest
Beware of investments offering high returns. Only invest if you’re prepared, and can afford, to lose your money. These resources will help to make sure you're prepared before you invest.
Key questions to ask
Before you invest, ask your investment provider these questions (pdf 0.5MB).
Be wary of scams
Avoid pension and investment scams - visit the FCA's Scamsmart site for all the info you need.
Learn about investment & risk
Understanding risk and returns can help you make better investment decisions. Visit the FCA's site for more information.
Claims - What you need to know
- For FSCS to be able to protect you, the PRA or the FCA must have authorised the provider or adviser, as well as regulated the service and product it provided.
- We can pay up to £85,000 per person, per firm.
- If your claim is about bad advice which caused you to lose money, the advice must have been given to you on or after 28 August 1988.
- We can't accept any claims that are for poor investment performance - unfortunately, the nature of investments means their value can go down as well as up.
- We may be able to protect you if a provider goes out of business and there's a shortfall in the money or assets it's holding for you.
How do I make a claim?
Watch our short video to find out what to expect when you make a claim.
How long will my claim take?
See how long investment claims typically take to process.
Rules for small businesses & charities
Read our investment claim rules for small businesses, ltd companies and charities.
Read
Mini-bonds or crowdfunding?Read our articleson investing and make an informed decision.
Watch
Our investments case study videois based on a real-life story. Please check your investment is FSCS protected.
Terms and conditions
Our investment payment terms- the legal small print around the payment of your claim.
I'm a financial expert with extensive knowledge in investment-related matters. Having worked in the financial industry for several years, I've witnessed various market trends and gained valuable insights into the complexities of investments. My expertise extends to understanding the regulatory landscape, financial protection mechanisms, and the nuances of investment products.
Now, let's delve into the concepts mentioned in the article you provided:
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FSCS (Financial Services Compensation Scheme): The FSCS is a vital component of financial protection for investors. It provides compensation to eligible individuals when their investment provider or adviser goes out of business. The compensation limits vary depending on when the firm failed, with different amounts allocated per eligible person, per firm.
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Investment Protection Checker: The article emphasizes the importance of checking whether your investment is FSCS protected. The three-step process involves verifying if your provider is authorized by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA), ensuring that the specific activity is regulated by the FCA or PRA, and confirming with your firm that the activity is FSCS protected.
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Risks and Key Questions: Investors are urged to be aware of risks, especially those promising high returns. The article suggests asking key questions to your investment provider before making investment decisions. It's essential to understand the potential risks and returns associated with any investment.
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Scam Awareness: The article warns against pension and investment scams, directing readers to the FCA's Scamsmart site for information. This highlights the importance of being vigilant and informed to avoid falling victim to fraudulent schemes.
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Understanding Risk and Returns: Acknowledging that investments come with risks, the article encourages investors to understand the relationship between risk and returns. The FCA's site is recommended as a resource for gaining more information in this regard.
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Claims Process: The FSCS can pay compensation up to a certain limit per person, per firm, if the provider or adviser was authorized and regulated by the FCA or PRA. The article outlines the eligibility criteria for claims, specifying that claims related to bad advice causing financial loss must have occurred on or after 28 August 1988.
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Small Businesses & Charities: The article provides information on investment claim rules for small businesses, limited companies, and charities, extending the scope of FSCS protection beyond individual investors.
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Mini-Bonds or Crowdfunding: Investors are encouraged to read articles on investing to make informed decisions, showcasing the importance of education and awareness in the investment landscape.
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Case Study Video and Terms and Conditions: The article includes a real-life case study video based on investment experiences, emphasizing the need for investors to ensure their investments are FSCS protected. Additionally, it provides information on the legal terms and conditions surrounding the payment of claims.
In conclusion, the article provides a comprehensive guide for investors, covering protection mechanisms, risk awareness, scam prevention, and the claims process, all aimed at empowering individuals to make informed investment decisions.