Investment Firm Collapse Compensation

Investment firms that are authorised by the Financial Conduct Authority (FCA) with investors being protected from firm collapse by the Financial Services Compensation Scheme (FSCS).

Protection Before January 2010

• 1^st £30,000 was 100% protected.
• Next £20,000 was 90% protected.
• Investment above £50,000 – no protection

Therefore, maximum protection was £48,000.

2010 to April 2019 maximum protection increased to £50,000.

April 2019 onwards, maximum investment firm protection was increased to £85,000 per person (the same level as bank/building society protection).

£85,000 is the current FSCS compensation limit for Investments.

This is limited to the following:

• £85,000 per investment firm per person.  If you have more than £85,000 deposited in one investment firm, you are only protected up to £85,000.
• If you are a couple and you hold a joint named investment, the maximum compensation is then £170,000 (£85,000 per person) per investment firm.

Not All Investment Firms Are Covered

For example, a life insurance investment bond is a whole of life policy which is protected under the Insurance compensation limits and not investment limits.

Investments that are no regulated by the FCA are not protected.

Protection for different investments may vary as the FSCS classifies investments in the following categories:

• Not in Bold Text:  Some investments may or may not have full protection up to £85,000 if the investment firm collapses, others may only be protected if regulated financial advice was given to invest in that area (even if unregulated).  Therefore, the investment itself may not be covered but a financial adviser firm collapse does have FSCS protection up to £85,000.  You need to check with each investment firm you have to be sure.
• Bold Text: Investments are not protected.

• Bitcoin
• Bitcoin cash
• Bonds
• Certificates representing certain securities
• Collective investment schemes
• Contracts for difference (CFDs)
• Crowdfunding P2P lending
• Crypto assets/cryptocurrency
• Debentures
• Derivatives
• Emissions allowances/ auction products
• E-money
• Endowments
• EOS (crypto asset)
• Ethereum (crypto asset)
• Fixed interest securities
• Futures
• Gilts
• Government bonds/securities
• Investment funds
• Life policies
• Mini-bonds
• Non-fungible tokens (NFTs)
• Open-ended investment companies (OEICs)
• Options
• Peer-to-peer loans (P2P)
• Ripple (crypto asset)
• Rolling spot forex contract
• Shares
• Spread bet
• Tracker funds & Exchange-traded funds (EFTs)
• Unit trusts
• Unregulated Collective Investment Schemes (UCIS)
• Warrants

Check Protection Now

• What does the FSCS cover?  https://www.fscs.org.uk/what-we-cover/
• FSCS ‘Investments’  https://www.fscs.org.uk/what-we-cover/investments/

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