The Financial Services Compensation Scheme (FSCS) is the UK’s statutory compensation fund for customers of authorised financial services firms. It can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. This will generally be because the firm has stopped trading and has insufficient assets to meet claims, or is ‘in default’ as described in the FSA rules.
On 1 January 2010 the compensation limits for investment, insurance and home finance intermediation claims changed.
Compensation limits for investment and home finance advice and arranging claims have increased to £50,000 - bringing the compensation limit for these classes in line with the limits for deposit claims.
Compensation for non-compulsory insurance will be paid at 90%, with no upper limit. Cover for compulsory insurance remains at 100% protection with no upper limit.
The new limits make it easier for consumers to understand the cover the FSCS provides.
Regulated Firms should consider updating their Terms of Business Letters; IDD / CIDD / Cost of Sales disclosure documentation to reflect the new higher figures.
For further information see
Financial Services Compensation Scheme
