MSE News

Investment and pension safety nets increase to £85,000

Consumers who see their investment or pension company go bust now have greater protection, with compensation limits boosted to £85,000.

The Financial Services Compensation Scheme (FSCS) increase for investments, pensions and a range of other financial products and services brings protection limits into line with the existing £85,000 limit for bank and building society savings.

Previously, investments, pensions and certain other products and services were only covered up to £50,000.

For more on how your money is protected, read our Savings Safety guide.

What exactly has changed?

Since 1 April you get FSCS protection on up to £85,000 with the following financial companies:

  • Investment firms and advisers
  • Pension firms and advisers
  • Mortgage brokers
  • Debt management firms

In addition, for long-term care insurance, the FSCS now covers an unlimited 100% of the cost of claims, up from £50,000 previously.

Annuities – a financial product that pays you an income each year until you die – continue to be covered at 100%, rather than the new £85,000 limit for pensions.

How does the FSCS safety net work? 

The FSCS pays out to consumers when a financial firm regulated by the Financial Conduct Authority (FCA) in the UK goes bust or can't meet compensation claims against it.

It is an official safety net fund set up by the Government and regulated by the FCA, which promises that, in the event of a firm collapsing, you get at least some of your money back.

The new limit of £85,000 applies to claims against firms that fail on or after 1 April 2019. 

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