The financial climate - your questions answered
Is my money covered under the Financial Services Compensation Scheme?
- How do I know my money is safe with The Co-operative Bank p.l.c.?
- Will The Co-operative Bank p.l.c. encounter problems in a recession?
- Is what happened to Northern Rock or HBOS likely to happen to you?
- Will what's happening affect my pension or investment with The Co-operative?
- Does the current crisis affect your ability to pay general insurance claims?
- What is the Financial Services Compensation Scheme?
- Is my money covered under the Financial Services Compensation Scheme?
Yes, provided you are what's called ‘eligible.' This means private individuals, some small businesses and anyone who has a compulsory insurance policy.
The Financial Services Compensation Scheme (FSCS) is the UK's compensation fund of last resort for customers of financial services firms. The Scheme pays compensation if an authorised financial services firm is in default, meaning it is unable, or likely to be unable, to pay claims against it. This will generally be because it has stopped trading and is insolvent - for example, it doesn't have enough money to cover what it owes to its customers and creditors.
The FSCS will pay compensation to customers for financial loss. The amount paid will depend on the basis of the customer's claim. There are maximum limits that apply to each claim. These limits are per person (per firm and type of claim).
Find out more about the compensation scheme.
The FSCS is free to consumers and funded from levies imposed on regulated firms. It's important to remember though that compensation will only be paid if a firm is in default and that the decision lies ultimately with the FSCS.
