FSCS - New Compensation limits

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23/02/1900

The new compensation limits for eligible investors under the Financial Services Compensation Scheme (FSCS) apply to claims, broadly speaking, against firms authorised by the FSA declared in default on or after 1 January 2010 following a rule change announced by the FSA last year.

Compensation limits for investment and home finance advice and arranging claims have increased to £50,000, bringing the compensation limit for these classes into line with the limits for deposit claims. Compensation for non-compulsory insurance will now be paid at 90%, with no upper limit. Cover for compulsory insurance will remain at 100% protection with no upper limit. The FSA claims that the new limits (which are indeed more straightforward than the previous ones) will make it easier for consumers to understand the cover the FSCS provides.
Summary of the new limits applying to eligible claims

Investments: Provision and mediation of investments: protection for 100% of £50,000.

Home finance mediation: Advising on or arranging house purchase finance: protection for 100% of £50,000.

Insurance business: Non-compulsory insurance provision (both general and life insurance): protection for 90% of the claim, with no upper limit.

General insurance intermediation: Non-compulsory general insurance and pure protection contracts (e.g. term, critical illness and income protection insurance): protection for 90% of the claim, with no upper limit.

This document is strictly for general consideration only. Consequently Capital Ideas cannot accept any responsibility for any loss occasioned as a result of any action taken or refrained from as a result of the information contained in it. Each case must be considered on its own facts after full discussion with the client's professional advisers

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