FSCS Investment Protection UK: What's Covered? 2026

How FSCS Covers Investments

The FSCS covers investments held with FCA-authorised firms. If a firm fails and cannot return your investments or cash, the FSCS can pay compensation up to £85,000 per person per firm. This limit applies to your total claims against that firm, not per investment or per account. Importantly, the FSCS covers investments (stocks, shares, funds, ETFs, bonds, and structured products) as well as cash held within an investment platform (such as uninvested cash in your ISA or dealing account). The protection does not cover investment performance losses — only losses from the firm's failure. If your portfolio falls in value because markets decline, the FSCS does not compensate you. The FSCS also covers losses from bad financial advice where the adviser has gone out of business and cannot pay your claim themselves. The scheme is funded by levies on FCA-authorised firms, not by taxpayers or investors. To claim, you must be eligible — generally, you must be a retail client of the firm. The FSCS website (fscs.org.uk) provides a claims service and information on how to apply.

£85,000 Limit Explained

The £85,000 FSCS limit applies per person, per firm, not per account or per investment type. If you have a Stocks and Shares ISA, a SIPP, and a general investment account with the same platform, your total FSCS protection across all accounts with that firm is capped at £85,000. However, if you hold accounts at different firms (e.g., Vanguard for your ISA, AJ Bell for your SIPP), you have separate £85,000 protection for each firm. The £85,000 limit is per banking licence — if two platforms share the same parent bank or licence, they count as one firm. The limit was increased from £50,000 to £85,000 in 2017 and is periodically reviewed. For cash held within an investment platform (uninvested funds), the £85,000 deposit protection applies separately from the investment protection limit. However, total cash across different accounts at the same firm is aggregated for the £85,000 cash limit. Joint accounts have separate protection — a couple with a joint investment account has £170,000 of combined protection (£85,000 each). Temporary high balances are protected up to £1 million for certain life events like house sales, inheritance, or divorce settlements for 6 months.

What Happens If Your Broker Fails

If your broker or investment platform fails, the first line of protection is client asset segregation. FCA rules require firms to hold client money and assets in separate accounts (client money accounts and nominee accounts), ring-fenced from the firm's own assets. In most cases, your investments are safe even if the firm goes bust because they belong to you, not the firm. The administrator will typically arrange for your holdings to be transferred to another platform. However, if assets are missing — because of fraud, poor record-keeping, or unauthorised use — the FSCS steps in. The FSCS can compensate you for the value of missing investments or cash up to £85,000. The claim process involves contacting the FSCS (usually through the firm's administrator), providing evidence of your holdings, and waiting for the claim to be assessed. The FSCS aims to process straightforward claims within 3 months but complex cases can take longer. Historically, most investment firm failures (like Beaufort Securities in 2018 or SVS Securities in 2019) resulted in client assets being returned, with the FSCS covering only shortfalls. The key safeguard is choosing an FCA-authorised firm that complies with client asset rules.

What Happens If a Fund Fails

Fund failures are different from platform failures. If a fund manager goes bust, your investments in the fund itself are typically protected because the fund's assets (the underlying stocks, bonds, or other investments) are held separately by a custodian or depositary. The fund's assets are not owned by the fund manager — they are held on trust for investors. The depositary is responsible for safekeeping and oversight. If the fund manager fails, a new manager is usually appointed, or the fund is wound up and proceeds returned to investors. However, if the fund's assets themselves suffer losses due to fraud, misappropriation, or the failure of a counterparty (e.g., a bank where the fund's cash is held), the FSCS may provide protection. The £85,000 limit applies to your total claims. Structured products and notes issued by banks are more complex — if the issuing bank fails, the FSCS may protect up to £85,000, but only if the product is covered (most structured products are eligible for the investment protection limit). Always check the product documentation and the issuer's FCA authorisation. For money market funds and other cash-like investments, the protection differs from a bank savings account, so understand the risks before investing.

Funds Held by a Custodian

When you invest through a platform, your investments are typically held in a nominee account or by a custodian. This means the legal ownership of the shares or units is registered in the nominee's name, but you are the beneficial owner. The platform or custodian is required by FCA rules to maintain accurate records of who owns what. In the event of the custodian's insolvency, your assets should be returned to you because they are not part of the custodian's estate. This is called the trust protection or safe custody arrangement. The FSCS only steps in if there is a shortfall — for example, if the custodian has incorrectly allocated assets or used client assets improperly. The FSCS protection of £85,000 per person per firm covers this shortfall risk. For larger portfolios, consider diversifying across multiple platforms to increase effective FSCS cover. Some platforms offer pooled nominee accounts where all clients' assets are held together, while others offer designated accounts where each client's holdings are separately identified. Both are acceptable under FCA rules, but designated accounts may make it easier to prove your entitlement in a failure scenario. Always read the platform's client asset agreement to understand how your investments are held.

Checking FCA Registration

The most important step to protect your investments is to ensure your provider is FCA-authorised. Only firms authorised by the Financial Conduct Authority are covered by the FSCS. Use the FCA's Financial Services Register (register.fca.org.uk) to check any firm before investing. The register shows whether the firm is authorised, what permissions it has, and its FCA reference number. Be wary of firms that claim to be "registered" but are not actually authorised — there is a difference between being on the register and being authorised. Clone firms are a common scam: fraudsters use the name and details of a real FCA-authorised firm to appear legitimate. Always use the contact details from the FCA register, not those provided by the firm contacting you. The FCA's warning list shows firms that are known to be operating without authorisation. Check whether the firm is covered by the Financial Ombudsman Service (FOS) for complaints. Most FCA-authorised firms also participate in the FOS, which handles disputes if you are unhappy with a firm's service. For additional safety, see our low-cost investing platforms guide which lists FCA-authorised platforms and their key features.

FAQs

Does FSCS cover losses from poor investment performance?

No. The FSCS only covers losses from a firm's failure (insolvency, fraud, or misappropriation of assets). It does not cover investment losses from market declines, poor fund performance, or bad investment decisions. Those risks are part of normal investing.

Is my SIPP covered separately from my ISA?

Not if they are with the same firm. The £85,000 limit applies per person per firm, regardless of how many accounts you hold with that firm. If you have a SIPP, ISA, and general account with the same platform, total cover is £85,000.

What should I do if my investment firm goes bust?

Contact the FSCS (fscs.org.uk) or the firm's administrator immediately. Gather statements showing your holdings. Do not transfer assets or take any action until you understand the process. In most cases, your assets will be returned or transferred to a new provider.