What Is the FSCS and How Do They Protect Your Pension

The Financial Services Compensation Scheme (FSCS) is the UK’s safety net for customers of authorised financial firms.

It was set up under the Financial Services and Markets Act 2000 and has been protecting consumers since 2001.

If a regulated company can’t pay claims, the FSCS may step in, and it’s completely free for you to use.

It can protect (subject to eligibility and limits):

• Banks and building societies;

• Credit unions;

• Pensions;

• Insurance;

• Investments;

• Mortgages;

• Debt management; and

• Payment Protection Insurance (PPI).

You can find more information on the Financial Services Compensation Scheme (FSCS) Website.

Pension Protection

The level of protection depends on how your pension is structured:

Long-term insurance contracts (e.g., annuities, many personal pensions):

• 100% protection

• No upper limit

Investment-based pensions (e.g., SIPPs):

• Up to £85,000 per person, per firm

Poor pension advice:

• Up to £85,000 per eligible claim

Defined benefit workplace pensions:

• Not usually covered by FSCS

• May be protected by the Pension Protection Fund (PPF)

During Pension Transfers

If you transfer your pension between providers, your money may briefly be held in a client or clearing bank account.

In these situations:

• FSCS deposit protection may apply up to £85,000 per person, per bank.

• The £85,000 limit includes any other eligible savings you hold with that same bank.

• Protection depends on the legal structure of the account.

In some cases, compensation for bank deposit failures can take up to three months.

What To Do if Something Goes Wrong

If you believe there has been a mistake with your pension:

• Contact your pension provider and raise a complaint.

• If you’re not satisfied with their response, you can refer the matter to the Financial Ombudsman Service.

• If the firm has gone out of business and you’re eligible, you may be able to claim compensation from the FSCS.

Important Information

• FSCS protection applies only to firms authorised by the FCA or PRA.

• Not all pensions or investments are covered.

• Compensation limits and eligibility rules can change over time.

For the latest information, visit the FSCS Website.

Risk Warning

As with all investments, your capital is at risk. The value of your pension can go down as well as up, and you may get back less than you invest.

This information is for general guidance only and does not constitute financial advice.

Peace of Mind at No Cost

FSCS protection is automatic, free, and UK-regulated.

While investing always involves some risk, it’s reassuring to know there’s a trusted, independent safety net designed to help protect your retirement savings if the unexpected happens.

Have a question? Call our UK team on 01260 540120.