The Financial Services Compensation Scheme (FSCS) is a UK-based government-backed compensation fund that provides protection to consumers in the event that a financial services institution becomes insolvent or is unable to meet its financial obligations. The FSCS is designed to provide a safety net for consumers by providing them with compensation in the event that their financial services provider is unable to fulfill its obligations.
The FSCS applies to a wide range of financial services firms, including banks, building societies, credit unions, insurance companies, and investment firms. It also covers a range of financial products, such as deposits, insurance policies, investments, and home finance products.
If your financial institution does not support the FSCS, it means that your deposits or investments with that institution may not be protected in the event that the institution becomes insolvent. This is why it is important to ensure that any financial services institution you use is covered by the FSCS.
If your financial services institution does become insolvent, the FSCS will step in to compensate you for any losses you may have incurred. The level of compensation you will receive will depend on the type of financial product you hold and the specific circumstances of your case. In general, the FSCS will aim to compensate you for up to £85,000 per person, per institution.
It is important to note that the FSCS is a last resort and should not be relied upon as a substitute for making informed financial decisions. It is always recommended that you carefully research any financial institution you plan to use and consider the risks involved before making any investment or deposit.
This page was last updated on May 1, 2023.