The Financial Services Compensation Scheme (FSCS) was established in December 2001 as the UK’s statutory compensation fund for customers of authorised financial services firms. The scheme is funded through levies on authorised firms and serves as a safety net to protect consumers if a financial firm fails.
The FSCS can pay compensation when a firm is unable, or likely to be unable, to meet claims against it. This typically occurs when the firm has ceased trading and has insufficient assets to settle its liabilities, commonly referred to as being ‘in default’ under the rules.
Compensation is available for a range of financial products and services, including deposits, insurance, investments, mortgage advice, and arranging. The amount of compensation available varies depending on the type of claim and the financial product involved.
