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How FSCS

protects
your money
A guide to the
Financial Services
Compensation Scheme
How FSCS protects your money 2

Contents About this document


About this document 2
This document tells you who
Is a financial services firmauthorised? 3
FSCS is and how we protect
1. Deposits 4
your money. You should still talk
2. Insurance policies 6
to your financial services firm
3. Insurance broking 6
to discuss how our protection
4. Investment business 7 What is a financial
applies to the products and servicesfirm?
5. Mortgage (home finance) advice or broking 7
services you have bought Examples of financial services
Who can claim compensation? 8
fromit. firmsinclude:
Find out more 9
banks
About FSCS building societies
FSCS is there to protect your money. Itis the What is a financial
credit unions
body which gives you automatic protection servicesproduct?
up to 75,000 if your bank, building society insurance companies
Examples of financial services
or credit union goes out of business; and
insurance brokers products are:
youll normally get your money back within
seven days. FSCS is funded by the financial investment firms current accounts
services industry, and is free to consumers.
financial advisors savings accounts
Sowhatever your money is for, its good to
know itsprotected. mortgage brokers. ISAs
We also cover a wide range of other financial There are limits to how much insurance policies
products and services such as investments, compensation we can pay, and
investments
pensions, financial advice, insurance broking, these are different fordifferent
mortgage advice and arranging. Different types of financial products. mortgages.
compensation limits apply.
How FSCS protects your money 3

Contents Is a financial services


About this document 2
firmauthorised?
There are four main ways to check thata firm
Is a financial services firmauthorised? 3
isauthorised:
1. Deposits 4
1. Check the documents the firm gave you
2. Insurance policies 6 they often show a Firm Reference Number
(FRN) or authorisation number.
3. Insurance broking 6
2. Check the firms website the FRN or
4. Investment business 7
authorisation number is often in the legal What sort of firms What products does
5. Mortgage (home finance) advice or broking 7 information section. doesFSCScover? FSCScover?
Who can claim compensation? 8 3. Call the firm and ask for their FRN or We only cover financial services We cover five different types
authorisation number (which is supplied firms that have been authorised by ofbusiness:
Find out more 9
tothem by the FCA orPRA). the Financial Conduct Authority
1. Deposits, such as money held
(FCA) or the Prudential Regulation
4. Use the Financial Services Register at in bank accounts including
Authority (PRA) to do business in
www.fca.org.uk/register, which has details cashISAs
the UK. So you should always check
of every financial services firm authorised to
that the firm has an FCA or PRA 2. Insurance policies, such as motor
dobusiness in theUK.
authorisation number, sometimes and home, or life insurance and
Some firms appear on the Financial Services referred to as a Firm Reference pension plans
Register as EEA-authorised. Depending on Number(FRN).
3. Insurance broking, including
the type of firm, this may mean we would not
advice about insurance policies
protect you. The firm may instead be part of
a compensation scheme in the country where 4. Investment business, including
their head office is based. You should check financial advice or investment
with the firm about the protection you will have products such ascollective
and which scheme provides it. investment schemes
5. Arranging and advice about
home finance, such as
The sections on the following mortgages.
pages explain what each type
of business includes, and the
compensation limits.
How FSCS protects your money 4

Contents 1. Deposits 2. The limit applies per authorised firm. This is


important because sometimes a firm operates
About this document 2 FSCS protects your deposits, whether youre an
more than one brand under the same FRN or
individual or a company. A deposit is money in
Is a financial services firmauthorised? 3 authorisation number. This means individuals with
accounts like current and savings accounts, including
accounts held under different brands with a firm
1. Deposits 4 cash ISAs. If your bank, building society or credit
operating under one FRN or authorisation number
union fails, we may be able to paycompensation.
2. Insurance policies 6 will only be entitled to a total of 75,000.
3. Insurance broking 6 You should therefore check:
4. Investment business 7 Compensation limit 1. whether you hold deposits with a bank or building
We protect up to 75,000 per person society that shares an FRN orauthorisation
5. Mortgage (home finance) advice or broking 7
or company, perauthorised firm. number with another brand of that firm, and
Who can claim compensation? 8
2. whether your total deposits with all those brands
Find out more 9 are more than 75,000.

There are two important Example


points to remember about the
If you have a current account with Bank X and
depositcompensation limit.
savings with Bank Y and they share one FRN or
1. The limit applies to individuals and companies, authorisation number, they are classed as a single
not accounts. This means that for joint accounts firm for the purposes of compensation. This means
the limit applies to each named account holder. your limit for compensation is 75,000 in total,
So, for example, if you have a joint account with shared across Bank X and Bank Y.
your spouse or partner, and no other accounts
of your own with that firm, you will each receive
up to 75,000 under the deposit limit. So FSCS Current account Savings account
would protect up to 150,000 of savings in a with Bank X with Bank Y
jointaccount.

Share one authorisation; classed as a single firm


Firm Reference Number (FRN): 123456

75,000 compensation limit


How FSCS protects your money 5

Contents How to find out if your bank This applies only to your main residence and
or building society is part of excludes buy-to-let properties or holiday homes.
About this document 2
alargerbanking group Generalsavings for a property do not qualify
Is a financial services firmauthorised? 3
Your bank or building society should provide this Money paid in relation to a marriage or civil
1. Deposits 4 information to you at least annually on your printed partnership or a divorce or dissolution of a civil
statement or electronically. There are three other partnership
2. Insurance policies 6
ways tocheck:
A redundancy pay out (whether voluntary or
3. Insurance broking 6
1. Ask your bank or building society whether it compulsory)
4. Investment business 7 trades under different brands with a single FRN
Compensation paid for unfair dismissal
orauthorisation number.
5. Mortgage (home finance) advice or broking 7
Benefits paid in respect of a disability or
2. Visit FSCS website to check whether the bank
Who can claim compensation? 8 incapacity*
or building society brands you have money with
Find out more 9 share a banking authorisation and whether all your Compensation paid for personal injury*
savings are protected: www.fscs.org.uk/protected.
Benefits paid under an insurance policy
3. Use the Financial Services Register at
Compensation for a wrongful conviction
www.fca.org.uk/register to look up your banks and
building societies FRN or authorisation numbers. Benefits paid on retirement
If any numbers are the same, they share a banking
Benefits payable on death
authorisation so one limit applies.
Compensation in respect of a persons death
Temporary high balances
A legacy from the estate of a deceased person or
FSCS also protects certain types of deposits above
money held on behalf of a deceased person for
75,000 held by individuals. We protect certain
the purpose of administering their estate.
temporary high balances up to 1,000,000 for a
period of six months*. These are exceptional and * There is no limit to the compensation payable for
short-lived deposits which result from certain major deposits relating to personal injury or disability or
life events. incapacity claims.
Deposits which qualify as a temporary high If a firm fails and you need to make a claim for
balanceare: deposits you have above 75,000, you will need to
provide written evidence that your deposits qualify
Money deposited in preparation for buying a
as a temporary high balance. You can find further
property, the proceeds of sale of a property or
information on the type of written evidence we
proceeds from releasing equity in a property.
require at www.fscs.org.uk.
How FSCS protects your money 6

Contents 2. Insurance policies 3. Insurance broking


About this document 2 FSCS can pay compensation if your insurance provider fails FSCS can pay compensation if:
and cannot pay valid claims under your policy or return your
Is a financial services firmauthorised? 3 you were mis-sold an insurance policy and lost
premiums. The types of policies we cover include motor, home,
money and that firm failed, or
1. Deposits 4 pet, travel and payment protection insurance (PPI). We also cover
long term insurance products such as life insurance or pensions - you were a victim of fraud, and the broker who
2. Insurance policies 6
while pensions and annuities are often thought of as investment sold you the policy has gone out ofbusiness and
3. Insurance broking 6 products, in reality they are usually long term insurance contracts. cannot return your premiums or money owed
toyou.
4. Investment business 7 We do not cover credit, marine, aviation or transport
businessinsurance. The types of policies we cover include motor,
5. Mortgage (home finance) advice or broking 7
home, pet, travel, payment protection insurance
Who can claim compensation? 8 Compensation limit (PPI) and other general insurances.
Find out more 9 Our main aim is to get continuity of cover for
Compensation limit
policyholders with long term insurance contracts.
This means, for example, we may try to transfer We can pay compensation of 90%
your insurance policy to a new insurance provider. If this is not of your claim with no upper limit.
possible, the level of compensation we can pay will depend on Weprotect 100%of any compulsory element of
the type of policy you have: insurance, like third-party motor insurance.
Motor insurance, Employers Liability insurance and
Professional Indemnity insurance: the entire claim relating
to the third-party element of your insurance, and 90% of any
remaining elements of the claim.
Death or incapacity of the policyholder due to injury,
sickness or infirmity: theentireclaim.
Home, pet, travel and payment protection insurance
(PPI) and other general insurances: 90% of your claim.
Pension savings or retirement income
(i.e. via an annuity): if it is provided under a life
insurance contract we will pay the entireclaim.
Endowment policies or investment bonds:
these are long term life insurance policies, with a
savings element, and we will pay theentireclaim.
How FSCS protects your money 7

Contents 4. Investment business 5. Mortgage (home finance)


About this document 2 FSCS can pay compensation if the firm concerned advice or broking
has failed and cannot return your investments or
Is a financial services firmauthorised? 3 FSCS may be able to help if a firm has advised you to
money owed, and you lose money because of:
enter into a mortgage agreement that wasnt suitable
1. Deposits 4
bad or misleading investment advice for you, and you lost money as a result. If the firm
2. Insurance policies 6 goes out of business and cannot pay back the money
negligent management of investments
it owes you, we can pay compensation. Whilst we
3. Insurance broking 6
misrepresentation, or cover the advice, we do not cover the lending or
4. Investment business 7 administration costs on the mortgage itself.
fraud.
5. Mortgage (home finance) advice or broking 7
We do not pay compensation if your investment Compensation limit
Who can claim compensation? 8 does not perform as well asyouhoped.
We protect up to 50,000 per person
Find out more 9 per authorised firm.
Compensation limit
We protect up to 50,000 per person
per authorised firm.
How FSCS protects your money 8

Contents Who can claim compensation? What does FSCS


About this document 2 not cover?
In general, individuals and small
Is a financial services firmauthorised? 3 We do not cover some
companies can claim compensation financial products. Here are some
1. Deposits 4
from us. In the case of deposits, examples:
2. Insurance policies 6
large companies are also able to Peer-to-peer lending
3. Insurance broking 6
claim compensation, although Money held on pre-paid credit
4. Investment business 7 cards
some exclusionsmayapply.
5. Mortgage (home finance) advice or broking 7 Christmas or other savings clubs
For general insurance all policyholders are eligible to
Who can claim compensation? 8 claim on the compulsory element of the protected Boiler room scam investments
insurance. Otherwise small companies must have an products sold by unauthorised
Find out more 9
annual turnover of less than 1m to be eligible to firms, often abroad, that defraud
claim compensation. customers of their money
Losses arising purely from
How long would it take to get my investment performance
money back? Some electronic payment
In most cases, for deposits, FSCS aims to pay services (such as PayPal) or
compensation within seven days of a bank, building currency bureaux
society or credit union failing. We will pay any
Insurance policies for credit,
remaining deposit claims, which are likely to be more
marine, aviation or transport
complex, within 20 working days.
business
For general insurance, we aim to make a payment
Reinsurance
within 14 working days of agreement of the claim.
Mortgage lending or
For payment protection insurance (PPI) claims, FSCS
administration.
aims to decide claims within three months.
For all other financial services products, we aim to
resolve claims within six months.
How FSCS protects your money 9

Contents Find out more


About this document 2

Is a financial services firmauthorised? 3


This leaflet explains how FSCS
1. Deposits 4
protects yourmoney.
2. Insurance policies 6

3. Insurance broking 6
For specific information about
4. Investment business 7
how this applies to your individual
5. Mortgage (home finance) advice or broking 7
circumstances you should speak to
Who can claim compensation? 8
your financial services provider(s) or
Find out more 9
advisor.
If you would like more information
about FSCS, including how to make
a claim, please visit our website at

www.fscs.org.uk

or call us on

0800 678 1100.

Copyright FSCS 2015 FSCS_item11_July2015