Compensation rules and eligibility

If the financial firm you’ve used goes out of business, you may be able to claim compensation from FSCS. There are limits to the protection we can provide and we follow rules set by UK regulators when deciding if a claim is eligible for compensation.

This page provides more information about what these rules require for a claim to be eligible. You can also listen to our podcast to learn why we do sometimes reject claims.

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Check if you can claim with FSCS

Use our simple online form to check if you can claim with FSCS. Our friendly customer support team are on hand to help if you have any questions.

We assess every claim we receive individually and even if we don’t think you’re eligible to receive compensation from FSCS, we’ll always try to explain the next steps you could take and refer you to an organisation that might be able to help.


FSCS compensation rules

The rules we follow are set by the UK financial services regulators: the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). We are required to follow these rules when deciding whether a claim is eligible for FSCS compensation.

These rules specify who can receive compensation, the firms that fall under FSCS protection, the activities and financial products that trigger our protection and how much compensation can be paid.

The main points are:

  • FSCS can only pay compensation when a firm has failed because it is unable, or likely to be unable, to pay claims made against it. We describe this as being ‘in default’.
  • The firm must have been authorised by either the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA), or a predecessor of one of these regulators, such as the Financial Services Authority (FSA), at the time you did business with it.
  • The authorised firm must have been carrying out a regulated activity for you. More information is provided in the section below.
  • Customers must have suffered a financial loss and there are limits to the amount of compensation that can be paid.
  • We need to find sufficient evidence that the firm owes you a ‘civil liability’, such as negligence  or a breach of certain rules which authorised firms are required to follow. This means that if you were to take the firm to court, the judge would decide in your favour.
  • FSCS can consider claims for compensation from private individuals, some charities, certain trustees and smaller businesses.
  • Larger businesses are generally excluded, although there are some exceptions to this for deposit and insurance claims.
  • FSCS may first require you to complain against a different firm if we think you have a valid complaint against it. We will tell you if this is the case.
  • Not all financial products and services are protected. Learn more about when FSCS cover is triggered.

Check your money is protected

Use our pension, investment and bank and savings protection checkers to find out whether your money is FSCS protected. Simply enter a few details and we’ll tell you how much of your money may qualify for FSCS protection if your provider went out of business, or what other steps you need to take to check this.

You can also check the FCA’s Financial Services Register. The Financial Services Register will give you more information about the financial firm you’re using and what they are regulated to do.

When you are considering a financial product, the provider should be able to tell you if it qualifies for FSCS protection.

Regulated activities

For FSCS protection to apply, your claim must be in connection with a regulated activity that was being carried out for you by an authorised firm. The government decides which activities are regulated by listing these in the Regulated Activities Order. Examples include advising on, arranging or managing certain types of investments. 

It's not always easy to tell whether a regulated activity is being carried out as there are many exceptions and it is very fact dependent. While a firm may be authorised, the activities it carries out may not be regulated or they may relate to a financial product which is not protected by FSCS.

This is why it is always a good idea to ask the firm you’re using to confirm that the activity it is carrying out for you is a regulated activity and under what circumstances you would be protected by FSCS if the firm failed.

Dates regarding historical claims

  • For investment claims, if a claim relates to business conducted before 28 August 1988, we are unlikely to be able to help. This is the date when these activities were first protected by an investor compensation scheme in the UK.
  • For mortgage advice and arranging, we will only be able to help if a claim relates to business conducted on or after 31 October 2004. These activities were not protected by FSCS before this date.
  • For claims relating to insurance intermediaries, we will only be able to help if a claim relates to business conducted on or after 14 January 2005. These activities were not protected by FSCS before this date. If a claim relates to travel insurance where the policy is sold alongside a holiday or other related travel, we will only be able to help if the claim relates to business conducted on or after 1 January 2009.

Claims about activities before 1 December 2001:

  • Slightly different rules apply for claims against an insurer or a bank that was insolvent before FSCS became operational (1 December 2001), or for claims against an investment firm that was declared in default before FSCS became operational. These claims are covered by the rules governing the separate compensation schemes that existed before that date.
  • FSCS will handle the claim. FSCS became the single compensation scheme on 1 December 2001, replacing former schemes.