Notes for editors

About FSCS

The Financial Services Compensation Scheme (FSCS) is the UK's statutory compensation scheme that protects customers of authorised financial services firms if they fail or have stopped trading. FSCS can pay compensation if an authorised firm is unable to pay back money it owes to customers in connection with a regulated activity.

FSCS protects:

  • Banks, building societies and credit unions
  • Investments
  • Pensions
  • PPI
  • Debt management
  • Endowments
  • Mortgage advice
  • Insurance
  • Funeral plans

FSCS is an independent body, set up by Parliament in 2001 under the Financial Services and Markets Act 2000. FSCS’s service is completely free to use and is funded by a levy on financial firms authorised by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).

Information about our current compensation limits is available on our What we cover page.

Declaring a firm in default

Before FSCS can pay compensation, it must be satisfied that an authorised financial services firm is not in a financial position to meet claims against it (e.g., if the firm has failed and entered an insolvency process such as administration or liquidation) and a protected claim exists. FSCS describes this as being ‘in default’.

FSCS can declare a firm in default if it is satisfied there is a protected claim against the firm; and is satisfied that the firm is unable to return money to the eligible customers itself. FSCS is required to do this before it can pay compensation to eligible customers.

Declaring a firm in default allows private individuals, who have suffered acute financial loss as a result of their dealings with that firm, to apply to FSCS for compensation. Some businesses and charities may also be eligible, depending on the type of claim.

Authorised firms

Dealing with a Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA) authorised firm that is carrying out certain authorised activities gives consumers access to the Financial Ombudsman Service and FSCS. Consumers can check that the firm they are dealing with is authorised using the FCA’s Financial Services Register.

Listen to podcast #43 Top 6 things people get wrong about FSCS to learn more about us, or read the information in our news article.

Media enquiries

Please get in touch with our public relations team if you have any questions or are interested in arranging an interview with an FSCS spokesperson.

Email: publicrelations@fscs.org.uk