Financial Services Compensation Scheme
Encyclopedia
The Financial Services Compensation Scheme is a "statutory fund of last resort" in the United Kingdom
, set up under the Financial Services and Markets Act 2000
to compensate customers of "authorised financial services firms" in the event of their insolvency. It consolidated previous compensation schemes into one combined scheme. The scheme covers deposit
s, insurance policies, insurance brokering, investments, mortgages and mortgage arrangement.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, set up under the Financial Services and Markets Act 2000
Financial Services and Markets Act 2000
The Financial Services and Markets Act 2000 is an Act of the Parliament of the United Kingdom that created the Financial Services Authority as a regulator for insurance, investment business and banking.-Outline:...
to compensate customers of "authorised financial services firms" in the event of their insolvency. It consolidated previous compensation schemes into one combined scheme. The scheme covers deposit
Deposit insurance
Explicit deposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due...
s, insurance policies, insurance brokering, investments, mortgages and mortgage arrangement.
Compensation limits
| Percentages | Maximum Compensation | ||
|---|---|---|---|
| Deposits Deposit insurance Explicit deposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due... |
100% of the first £85,000 per person per firm (for claims against firms declared in default from 31 December 2010). |
100% of the first £50,000 per person per firm (for claims against firms declared in default from 7 October 2008). |
£85,000 |
| Investments | 100% of the first £50,000 per person per firm (for claims against firms declared in default from 1 January 2010). |
£50,000 | |
| Mortgage advice and arranging | 100% of the first £50,000 per person per firm (for claims against firms declared in default from 1 January 2010). |
£50,000 | |
| Insurance Business (e.g. pensions, life assurance, home and travel) |
90% of the claim with no upper limit. Compulsory insurance is protected in full. | Unlimited | |
| General insurance advice and arranging (for business conducted on or after 14 January 2005). |
90% of the claim with no upper limit. Compulsory insurance is protected in full. | Unlimited |