How the FSCS Protects Your Pension
A Safety Net for Your Savings
The Financial Services Compensation Scheme (FSCS) is the UK’s compensation scheme for customers of failed authorised financial-services firms. Whether a pension is protected — and the limit — depends on the product, the firm that failed and whether the claim is eligible.
What the FSCS Means for You
FCA authorisation alone does not mean every loss or every part of a pension is covered. Protection depends on which regulated firm or product has failed and how the pension and its underlying investments are structured.
Penny’s Involvement with the FSCS
To understand the position for a particular pension, start with the Financial Services Compensation Scheme guidance and check the provider’s own disclosures. The legal chain behind the plan matters, so do not assume one limit applies to the whole pension.
Comprehensive Coverage
If a failed pension provider is a UK-regulated insurer and the pension qualifies as a contract of long-term insurance, FSCS protection is normally 100% with no upper cap. Claims involving a SIPP operator, a pension investment or regulated pension advice are generally limited to £85,000 per eligible person or scheme member, per failed firm. Eligibility and limits depend on the circumstances.
What Isn’t Covered
Occupational pension schemes are not protected by the FSCS in the same way. An eligible defined benefit scheme may instead be protected by the Pension Protection Fund, subject to its rules.
Effortless and Free
You can claim directly from the FSCS without using a claims company, but compensation is not automatic. The FSCS assesses whether the failed firm, product, loss and claimant meet its eligibility rules.
