What do the financial services compensation scheme do?

The Financial Services Compensation Scheme (FSCS) is the UK’s statutory Deposit insurance and investors compensation scheme for customers of authorised financial services firms. The scheme covers deposits, insurance policies, insurance brokering, investments, mortgages and mortgage arrangement.

What businesses are protected by the Financial Services Compensation Scheme?

Currently, individuals’, charities’ and businesses’ cash deposits are protected by the FSCS up to the value of £85,000 with an authorised bank or building society. Joint account holders benefit from up to £170,000 protection.

What is the Financial Services Compensation Scheme limit?

Set up by parliament and funded by the financial services industry, FSCS is a completely independent and free service. This means FSCS can pay back any money you hold with a failed bank or building society, up to its compensation limit of £85,000 per person.

Who can claim under FSCS?

FSCS can only consider claims against firms that were authorised by a UK regulator at the time the advice was given. The UK’s regulators are the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

Should you have all your money in one bank?

Keeping all of your accounts at a single bank just makes life simpler. It means that … And let’s not forget that keeping all of your accounts at the same bank means that the institution has more of an incentive to develop a great relationship with you.

What is the maximum amount of money protected?

£85,000
Under the FSCS the first £85,000 (as of January 2017) of your savings (or £170,000 if your money is held in a joint account) is protected in the event that the bank or building society goes bust. This threshold is the same as the €100,000 compensation offered to savers with European banks.

Who funds the financial services compensation scheme?

We’re able to pay our customers compensation because we are fully funded by the financial services industry. Firms authorised by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) pay us an annual levy which funds the cost of running our service.

How much money should you keep in a bank?

One rule of thumb often recommended by financial experts is keeping three to six months’ worth of expenses in emergency savings. So if your monthly expenses are $3,000, then you’d want to have between $9,000 and $18,000 in a savings or money market account that’s readily accessible when you need it.

How does the Financial Services compensation scheme work?

This means that FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. The FSCS is an operationally independent body, set up under the Financial Services and Markets Act 2000 (FSMA), and funded by a levy on authorised financial services firms.

Who are the firms covered by the FSCS?

Any firm that is authorised by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) is covered by the FSCS. The scheme was set up under the Financial Services and Markets Act 2000 and became active on 1 December 2001.

Can a business account be protected under the Financial Services compensation scheme?

Yes – if you have a business current account or savings account, you’ll still be protected up to £85,000, but if you have personal money with the same institution, it’s a bit more complicated.

How long does it take to get money back from financial services compensation scheme?

In the vast majority of cases savings are refunded in less than 7 days. From 3 July 2015 some types of temporary high balances of up to £1,000,000 are protected for up to six months. (for claims against firms declared in default from 1 April 2019).