Compensation
If a UK financial services firm is unable, or likely to be unable, to pay claims against it you may be able to get compensation from the Financial Services Compensation Scheme (FSCS). The service is free to customers.
Where FSCS fits in
The FSCS covers business conducted by firms authorised by us. You can check if a firm is authorised by us on Check our Register.
If you have a complaint or claim against an authorised firm that is still trading, you should contact that firm directly – see Making a complaint.
If you have a claim against a firm that has stopped trading you should first try to contact the firm to see if it can pay your claim. If the firm cannot pay claims against it, the FSCS may be able to help.
What's covered by the scheme?
The FSCS covers:
- deposits, such as bank accounts;
- most insurance policies;
- general insurance advice and arranging (for business on or after 14 January 2005);
- connected travel insurance – where the policy is sold by travel firms and holiday providers (for business on or after 1 January 2009);
- investment business; and
- mortgage advice and arranging (for business on or after 31 October 2004).
For further information see the FSCS booklet A guide to the work of the Financial Services Compensation Scheme on the FSCS website.
Who can get compensation from the FSCS?
If you use an FSA-authorised firm and it goes out of business, you can go to the FSCS, which may be able to help.
If you deal with a firm that is not authorised by us, you will not normally be able to use the compensation scheme if things go wrong.
The FSCS can help:
- private individuals;
- some small businesses; and
- all policyholders of compulsory insurance policies.
How much compensation could I get?
Different rules and compensation limits apply depending on what the claim is for. The FSCS cannot always cover 100% of your loss. If you owe money to the failed firm (for example loans, mortgage or credit card debts), these will be taken into account before any compensation is paid. For details, see the FSCS website.
What happens if I have more money invested than the limit?
Provided you meet all the conditions to qualify for compensation, the FSCS will pay you compensation up to the limit. You may also receive a further payment, or payments, of your share of any money left in the failed firm. This money will not necessarily cover all of your loss, and it is not possible to say in advance how much you might receive. This will depend on how much money was left in the firm when it failed and how that money is allocated.
This table lists the largest UK deposit takers, and how they are authorised by us. It shows how the FSCS limits would apply for most customer accounts – it is not a complete list of deposit takers covered by the FSCS.
List last updated 3 July 2009.
What about firms not based in the UK?
By law, most financial services firms must get our authorisation before they can do business in the UK. Our Register has information on all authorised firms currently doing business in the UK. The Register includes firms that are UK authorised as well as those authorised in another European Economic Area (EEA) state that also conduct business in the UK.
If you are considering or currently doing business with a firm authorised in another EEA state you may wish to ask for further information from the firm or its UK branch about its complaints and compensation arrangements. This is because the position may differ compared to a UK authorised firm. EEA firms will also be able to provide you with details of the extent of their regulation by us in the UK.
Some EEA states’ deposit protection schemes provide a higher limit than that provided by the FSCS (ie more than 100% of £50,000). It is the home-state scheme’s responsibility to pay up to its maximum limit. Following increases in the compensation limits in Ireland, the Netherlands and Belgium at the end of 2008, consumers have greater protection than the FSCS offers and so are not covered by the FSCS. UK branches of firms authorised in those countries have written to their customers to explain the change – see list of firms below.
Where another EEA state’s scheme has a lower level of protection than the FSCS, an EEA firm operating in the UK can choose to 'top up' into the FSCS. For further information on this and to determine if your firm has 'topped up', please see the FSCS website.
List of institutions now solely covered by their home-state deposit protection scheme
| Country | Institution |
|---|---|
| Belgium | Fortis Bank SA/NV |
| Ireland | Anglo Irish Bank Corporation plc Bank of Ireland Merrill Lynch International Bank Limited |
| Netherlands | AKbank ING Direct NV TD Waterhouse Bank NV Triodos Bank NV |