FSCS Details

FSA update on Banking and compensation reform.(PDF Download)

The FSCS is the compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading we may be able to pay compensation to its customers.

The actual level of compensation you receive will depend on the basis of your claim. The FSCS only pays compensation for financial loss.   Compensation limits are per person (per firm and type of claim).

Slightly different limits and rules apply if you have a claim against an insurer or a bank that was insolvent before the FSCS became operational (1 December 2001), or if your claim is against an investment firm that was declared in default before the FSCS became operational.

  • Deposits: £50,000 per person per firm (for claims against firms declared in default from 7 October 2008).

    100% of the first £50,000.

For more details visit the FSCS Deposit Limits page.

  • Investments: £50,000 per person per firm (for claims against firms declared in default from 1 January 2010).

    100% of the first £50,000.

For more details visit the FSCS Investment Limits page.

  • Home Finance (e.g. mortgage advice and arranging): £50,000 per person per firm (for claims against firms declared in default from 1 January 2010).

    100% of the first £50,000.

For more details visit the FSCS Home Finance Limits page.

  • Insurance Business: unlimited.

    90% of the claim with no upper limit. Compulsory insurance is protected in full.

For more details visit the FSCS Insurance Limits page.

  • General insurance advice and arranging: unlimited (for business conducted on or after 14 January 2005).

    90% of the claim with no upper limit. Compulsory insurance is protected in full.


* From 30 June 2009, the deposit compensation limit is the higher of £50,000 or €50,000. In the event of default, the Euro amount will be calculated by reference to the currency exchange rate on the day of default.

For claims against banks, building societies or credit unions declared in default between 7 October 2008 and 29 June 2009, the FSCS can pay compensation for financial loss of up to £50,000 for deposit claims (100% of the first £50,000).

Amounts owed to a failed bank (for example loans, mortgage or credit card debts) are taken into account before any compensation is paid.

For claims against credit unions declared in default between 1 October 2007 and 6 October 2008, the maximum level of compensation is £35,000 (100% of the first £35,000). For claims against credit unions declared in default before 1 October 2007, the maximum level of compensation is £31,700 (100% of the first £2,000 and 90% of the next £33,000).

Deposits made by private individuals to any authorised firms are protected by the FSCS. These can be referred to as "retail deposits".

Depositors may still receive a share of their savings above £50,000 back following any distribution of assets as part of the insolvency process for a failed bank. This would be a matter for the insolvency practitioner to determine and any recovery would, by necessity, vary according to the circumstances of the specific failure.

The actual level of compensation you receive will depend on the basis of your claim. FSCS only pays compensation for financial loss.

Compensation limits are per person (per firm and type of claim).

The FSA introduced a temporary rule on 27 November 2008 relating to the merger of building societies, which is effective from 1 December 2008. A merged building society will be able to keep separate compensation limits for customers who already had accounts with both building societies before a merger. As a result, those customers do not lose any protection and retain the FSCS limit of £50,000 for accounts with each predecessor business. Depositors who join the merged building society will only be entitled to the usual FSCS coverage for deposits of £50,000, regardless of whether they open accounts with each of the two merged businesses. The new rule will operate until 30 September 2009. Further information can be found on the FSA's website.

This rule change affects mergers between building societies only, not mergers between two banks, or between a bank and a building society. This is because the laws that affect building societies and banks are different. If two banks merge they have the ability, should they wish, to retain separate authorisations and separate coverage under the FSCS. This is not the case for building societies.

Slightly different limits and rules apply if you have a claim against an insurer or a bank that was insolvent before the FSCS became operational (1 December 2001), or if your claim is against an investment firm that was declared in default before the FSCS became operational.