What’s the FSCS?

When a UK financial firm can’t pay what it owes, because it’s gone out of business, the Financial Services Compensation Scheme (FSCS) may be able to help compensate you for losses. For regulated financial activities that are being carried out by a regulated firm, the FSCS could cover things like savings, insurance, investments, and pensions (more on this below).

Before FSCS can pay compensation, the company must be declared ‘in default’ officially. This means it’s been confirmed the company can’t, or is very unlikely to, pay what it owes. Only after that does FSCS start checking claims and paying compensation within the legal limits.

Criteria for successful claims

The FSCS doesn’t just pay out automatically, it follows strict rules set by the FCA and PRA. These rules are in the FCA Handbook under the COMP (Compensation) sourcebook and in PRA policy for deposit protection. Some of the criteria to make a successful claim include:

1. the company must have been authorised by the FCA or PRA when you did business with it.
2. the product or service must be covered under FSCS rules (for example, deposits, certain investments, insurance policies, and pensions).
3. you must be eligible, which usually means you’re a private individual or a small business, but there are exceptions.
4. your loss must be because the company failed, not because of poor investment performance or something outside FSCS’s scope.
5. compensation limits apply—for example, up to £120,000 for deposits or savings, £85,000 for pensions, investments, insurance, mortgages, PPI, debt management, and funeral plans.
6. the company must be declared ‘in default’ before the FSCS can pay.

FSCS protects a wide range of financial products, but the level of cover depends on what products you have. The main categories include deposits, insurance, investments, pensions, mortgages, funeral plans, and debt management.

And no need to hide your cash under the mattress with the FSCS because money held in UK-authorised banks, building societies, and credit unions is protected up to £120,000 per person, per bank as of 30 November 2025 (historical limits differ). These limits, whether for a personal or joint account, apply to the whole banking group (not each brand).

So, if you’re using a savings account, like one through Aviva Save, your money is covered up to the FSCS limit if the bank or building society holding your savings goes out of business. You can also check out detailed information on all our partner banks and their FSCS cover for Aviva Save.

Some investments may be covered, like stocks and shares ISAs, but only if the company you invested through goes out of business. If that happens, FSCS can pay you up to £85,000 per person, per company (if the firm failed after 1 Apr 2019). This includes things like shares, investment bonds, and some pension products. FSCS can also help if you got bad advice from an authorised adviser who’s now failed. But there are limits. FSCS doesn’t cover losses just because your investments went down in value, that’s part of normal investing. It also won’t cover unregulated products like cryptocurrency or certain overseas schemes. So, FSCS is there to protect you if the company fails, not if the market dips.

When an insurer fails, FSCS can help in three ways. First, if your policy is replaced by a new insurer, FSCS can pay towards the cost of that new policy. Second, if your policy isn’t replaced, FSCS can refund the unused part of your premium, usually 90% of what’s left. If you paid through a finance company, the refund goes to them. Finally, if you have a valid claim on your policy, FSCS will pay either 90% or 100% of the claim value, depending on the type of insurance.

What else may be covered?

There may be specific details, conditions or dates for what's covered under each product or service, so it's worth checking with the FSCS to be sure. for what’s covered under each product or service, so it’s worth checking with the FSCS to be sure.

Individuals

Most private individuals are eligible for FSCS protection, provided the financial company they dealt with was authorised by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA) at the time of the transaction.

Small businesses, charities, and trustees

FSCS protection isn’t just for individuals. Many small businesses, limited companies, charities, and certain trustees (people who are legally responsible for looking after someone’s money) are also eligible.

• Small businesses and limited companies: Most small businesses are covered, especially when it comes to money held in business bank accounts, as long as the business is registered in the UK and the account is in the company’s name.
• Charities and trusts: Charities and trusts can get FSCS protection too, as long as they’re properly registered and it’s clear who owns the account. If you’re a trustee (someone looking after money for others), you can make a claim for the people you represent so long as they’re eligible. Just keep in mind, there are some exceptions, especially for bigger pension schemes and certain types of trusts, which might not be covered.

What do you need to qualify?

To get help from the FSCS, you need to tick a few boxes:

• The company you used must have failed (gone out of business and can’t pay you back).
• The company had to be authorised by the FCA or PRA when you used them.
• You must have lost money because of the company’s failure, not just because of normal ups and downs in the market.
• There must be a good reason for your claim, like the company was negligent (careless) or broke the rules.

Step 1: Check if your eligible

Before you start, the FSCS recommends using their online eligibility checker or reading their guidance to see if your situation is covered. You’ll need to know if the firm you dealt with was authorised and if your loss is the kind the FSCS covers.

Step 2: Gather your information

You’ll need details like your account numbers, statements, and any paperwork that shows your relationship with the failed company. Check out the FSCS website to help you organise the documents you’ll need, too. 

Step 3: Make your claim online

Most claims can be started online through the FSCS website. There’s a step-by-step form that asks for your details and the type of claim you’re making (for example, deposits, investments, or pensions).

Step 4: FSCS reviews your claim

Once you’ve submitted your claim, the FSCS will check if you’re eligible and if the failed company owes you money. They might ask for more information if anything’s missing or unclear.

Step 5: FSCS communicates their decision

The FSCS will keep you updated by email or post. If your claim is successful, they’ll tell you how much compensation you’ll get and when you’ll be paid. If your claim isn’t covered, they’ll explain why and may suggest other organisations that could help (like the Financial Ombudsman Service).

Step 6: Payment

If your claim is approved, the FSCS pays compensation directly into your bank account. For most deposit claims (like savings accounts), the FSCS aims to pay within 7 days of the bank or building society being declared in default.  For more complex claims, like investments or pensions, it can take longer, sometimes several months, because they need to check more details and paperwork.

If you want to check exactly what you need to make a claim, or see if you’re eligible, you can visit the FSCS’s official claims page. There’s also a handy protection checker tool that helps you find out if your money is covered.

The FSCS plays a big part in keeping the UK’s financial system steady and trustworthy. By protecting people’s savings and investments when authorised companies go out of business, it can help the UK public feel more confident about using banks and other financial services. This trust is especially important during tough times, like financial crises or when big companies fail, because it stops people from panicking and pulling out their money all at once.