MS
mis-selling.co.uk

Financial Services Compensation Scheme (FSCS) — Complete Guide

The UK's statutory compensation scheme of last resort. If an FCA-authorised firm has failed and can't pay valid claims, the FSCS steps in — up to £85,000 per person per firm.

Quick Answer: The FSCS is the UK's statutory 'lifeboat' for failed financial firms. It pays up to £85,000 per person per firm for investment, pension and deposit claims. You can only claim once the FCA has declared the firm 'in default'. FSCS has paid more than £375 million in SIPP mis-selling claims to date. Source: FSCS Annual Report 2024/25; COMP 10.

What the FSCS covers

  • Investment advice & funds — up to £85,000 (COMP 10).
  • Pensions (including SIPP mis-selling) — up to £85,000.
  • Deposits — up to £85,000 per person per authorised bank/building society.
  • Insurance — 100% for compulsory insurance (motor, employer's liability); 90% for other long-term insurance.
  • Mortgages & home finance — up to £85,000.

When you can (and can't) claim

You can claim from the FSCS only when all three of the following are true:

  1. The firm was FCA (or PRA) authorised at the time of the act complained of.
  2. The firm has been declared "in default" by the FSCS.
  3. The claim relates to a protected activity under COMP 5.

If the firm still trades, you must go to the Financial Ombudsman Service instead. Search the current failed-firm list on our FSCS default register.

How to make an FSCS claim

  1. Confirm the firm is on the default register.
  2. Gather evidence — advice suitability report, fact-find, statements, correspondence.
  3. Submit the FSCS online claim form or instruct a solicitor to do it for you.
  4. FSCS validates, calculates redress using FCA methodology, and pays direct.

See Evidence for a mis-selling claim for the exact documents to gather.

How compensation is calculated

FSCS uses the FCA's loss-basis methodology: they compare where you would be today if the correct advice had been given, and cap the shortfall at £85,000. For SIPPs the calculation includes the lost fund value plus lost growth. See How compensation is calculated.

Why SIPP claims take longer

SIPP mis-selling claims (Berkeley Burke, Hartley Pensions, Rowanmoor, Guinness Mahon) typically take 12–18 months because the SIPP operator's own insolvency has to progress before the FSCS can assess the residual loss. Interim payments are sometimes possible.

Frequently asked questions

What is the FSCS compensation limit?

£85,000 per person per firm for investment, pension and long-term insurance claims. Deposits (bank accounts) are also protected up to £85,000. Some categories differ — check FSCS COMP 10 for the current limits.

When can I claim from the FSCS?

When an FCA-authorised firm has failed (is 'in default') and cannot pay claims itself. The FSCS maintains a public default register at fscs.org.uk. Unauthorised firms are almost never covered.

How long does an FSCS claim take?

FSCS aims to decide most straightforward claims within 6 months, but SIPP and complex investment cases regularly take 12–18 months because the SIPP operator's own insolvency process must complete first.

Does FSCS cover unregulated investments?

Not directly — but if a regulated adviser negligently recommended an unregulated investment (a UCIS, a mini-bond, storage pods inside a SIPP), the advice itself is the compensatable event under FSCS COMP 5.

Related pages