The financial services compensation scheme (FSCS) is a fund of last resort that is available to compensate consumers if an authorised financial services provider is unable to meet claims against it. A financial services provider may not be able to meet claims against it in instances such as a lack of assets, insolvency or because it has ceased trading.
The FSCS covers banking deposits up to £85,000 per bank and investments are covered up to £50,000.
Investors and savers should ensure that their banking and investment service providers are authorised providers.
On July 3rd, the FSCS announced that the deposit protection limit will be reduced to £75,000 as opposed to £85,000 – effective from January 1st 2016.