Financial Services Compensation Scheme FSCS is a compensation scheme based in the UK. They help protect any customer of a financial services firm that has failed. If a firm cannot pay claims against it and has failed, you can contact FSCS to help you compensate for your claims. FSCS is very easy to use.
You can submit your claim through their online claims service, which is completely free to use. FSCS is operated independently of government and financial service agencies. FSCS services aim to increase the public’s market confidence and protect their customers.
FSCS Mission
FSCS aims to provide their customers with their rightful claims after the failure of a financial firm. FSCS will provide their customers with fast reimbursements in failing firms. With the new changes in the environment and expectations, FSCS will adapt to these changes to provide their customers with the best services possible.
FSCS will try their best to lower their risk of failure and build trust with their customers. They aim to protect their customers against a failing firm. FSCS strives to earn their customers trust by making independent choices, running efficient operations and dealing with financial issues with resilience and putting their customers first at all times.
FSCS History
FSCS has grown and expanded its capabilities since beginning in 2001. Since the financial crisis in 2008, FSCS aim was to protect the depositors at failing firms by assuring them that they could be compensated within days instead of weeks. Since 2011, FSCS has been compensating their customers within a week.
This has been done with 50 credit unions and one small bank, compensating £60 million to their customers. FSCS has now developed their services to be more modern and professional. FSCS has introduced their five-year plan and vision for a better future.
FSCS Five Year Plan
FSCS five year plan was released in 2014, which outlines seven major requirements with hopes to provide better services. These requirements will be vital to FSCS in the 2020s as well. FSCS has all of the following requirements.
1. Modernising Their Services
- Services for handling claims has been updated
- Online services have been launched by FSCS, with 95% of the applicant applying online.
- FSCS signed a new strategic outsourcing agreement that will alter its services in the next decade.
2. Improving Value for money
- FSCS claims processing time and expense were significantly lowered
- Over the last five years, claims processing time and cost at FSCS has been decreased by 23%.
3. As a creditor achieving excellence
- FSCS reclaimed £20 billion from bank failure in 2008.
- FSCS reimburse all £20.5 billion from HMT in the same year.
- FSCS has compensated £375 million to the industry in the last five years.
4. Various different compensation routes
- FSCS providing cover for various failed insurances
- FSCS customers money were returned from insolvent broker deals
5. Better Contingency Planning
- FSCS has now been included in authorities preparation for any future failures.
- To provide a fast and easy payout, reliable service has been established
6. Engaging People
- FSCS maintained the best company to work for and investors in people certification.
- FSCS has won various national awards
7. Raising Awareness
- FSCS has raised public awareness on protecting deposits to an 80%
FSCS Strategy
- Prepare: FSCS is well prepared to help their customers be compensated even during a complicated and complex failure and still be paid within seven days. To maintain public trust and confidence.
- Protect: FSCS aims to protect people during difficult times and help them get back on their feet through their great customer experience.
- Promote: FSCS raise awareness to the public on protected and unprotected services. This increases public confidence in the market.
- Prevent: FSCS contributes with their regulatory and stakeholders to prevent future failures and reduce compensation loss.
FSCS Compensation Limits
- Bank, building society or credit union: up to £85,000 per person and £170,000 for joint accounts.
- Debt Management: up to £85,000 per person and firm.
- Mortgages: up to £85,000 per person
- Insurance: The kind of insurance you have will affect your claim.
- Investment: up to £85,000 per person
- Pension if your pension provider fails: 100% of your claim
- Pension if you SIPP operator fails: up to £85,000 per person and firm
- Bad pension advice: up to £85,000 per person and firm
FSCS Claiming Process
FSCS services allow their customers to use their online claim services. You can use their online claim service for insurances, pensions, investments, debt management, mortgages, and payment protection insurance. In the case that your bank, building society or credit union has failed, your money will be compensated automatically without a claim up to the compensation limit.
Who can make a claim?
- When your firm can not and is not likely to pay your claims. The FSCS will carry out an investigation to check the firm financial position.
- FSCS will pay only if the claim falls under their guidelines.
- FSCS can only compensate for financial loss within a limit.
- Individuals, as well as a small businesses, can claim.
- Large business is not included, but there are a few exceptions for deposits and insurance claims.
Why is FSCS Better?
Usually, the Claims Management Company charges a fee to handle your claim, unlike FSCS that is totally free. Therefore, you will be able to save a lot of money with FSCS. Claims management company goes through FSCS anyways, so the customers should do it themselves to save time.
FSCS knows the tough and stressful conditions you are in, so their customer services will help you all through the way.
Bottom line
FSCS is a better option than a Claims management company. Usually, the Claims Management Company charges a fee to handle your claim, unlike FSCS that is totally free. You will be able to save a lot of money with FSCS.
Claims management company goes through FSCS anyways, so the customers should do it themselves to save time. FSCS knows the tough and stressful conditions you are in, so their customer services will help you all through the way. In conclusion, FSCS is a better option for you!
