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What the compensation rules are trying to protect
If a savings provider fails, the Financial Services Compensation Scheme (FSCS) may pay compensation to eligible savers in the UK. The key question is whether your money is treated as being held directly with the bank or building society, or indirectly through a broker or platform.
In most cases, the FSCS looks at who the deposit taker is, not just who you used to place the money. So if your savings end up as a deposit with a protected bank, compensation is usually based on that underlying provider.
Savings held through a broker or platform
Many broker and platform services let you spread cash across different savings accounts or notice accounts. They may act as an intermediary rather than the actual holder of your money. That means FSCS protection usually follows the bank or building society where the deposit sits.
If the broker or platform fails, the position can be different. Any cash it holds for you as client money may be covered under FSCS rules for investment firms, but this is separate from deposit protection. The limits and rules may not be the same as when a bank fails.
How FSCS limits are applied
For bank and building society deposits, the standard FSCS limit is up to £85,000 per person, per authorised institution. If the provider is part of a banking group, the limit may apply across that group, not to each brand separately.
When you use a platform, your protection is usually assessed by looking through to the underlying savings provider. If your money is split between several banks, you may have separate protection for each one, provided they are distinct authorised institutions.
What to check before relying on protection
Read the platform’s terms carefully to see whether your money is held as an agency deposit, client money, or in some other structure. This affects which compensation rules apply if something goes wrong. The product information should also explain which bank or banks are taking the deposits.
It is also worth checking whether any interest earned is included in the protected balance. If your savings and accrued interest push you over the FSCS limit with one provider, the excess may not be fully protected.
What to do if a provider fails
If a bank, building society, broker, or platform fails, do not move money around without understanding the consequences. Wait for official guidance from the provider, the platform, or the FSCS. In many cases, compensation is paid automatically once eligibility is confirmed.
Keep records of statements, account numbers, and platform correspondence. These can help if your money was spread across different providers or if it is unclear how your savings were structured. If in doubt, the FSCS website can help you check whether protection is available.
Frequently Asked Questions
It is protection that may pay money back to eligible savers if a savings provider fails and their savings were held through a broker or platform, subject to the rules of the relevant compensation scheme and the account structure.
Eligibility usually depends on whether you were a protected customer, whether the provider failure is covered by the scheme, whether the savings were held in an eligible way through the broker or platform, and whether any limits or exclusions apply.
If the savings provider fails, the compensation scheme or administrator reviews who owned the savings, how they were held, and whether they are covered, then pays eligible claims up to the applicable compensation limit.
Coverage can include certain cash savings products held through intermediaries, but it depends on the exact product, the provider, and how the savings were structured or distributed through the broker or platform.
Joint accounts may be covered if the savings product is eligible and the account structure is recognised by the compensation scheme, with compensation typically assessed according to each holder's share or the scheme's rules.
No, compensation is not always automatic. In many cases, the failed provider, administrator, or compensation body must verify your holdings and may ask you to confirm details before payment.
The amount available depends on the applicable compensation limit, the amount of eligible savings held, and whether any previous payments or offsets apply. Compensation is usually capped per eligible person per provider.
You may need account statements, provider confirmations, broker or platform records, identification, proof of ownership, and any correspondence showing the savings were held through the broker or platform.
You usually submit a claim through the administrator, compensation scheme, or designated claims portal, providing evidence of your savings and following the instructions issued after the provider failure.
Timing varies depending on the complexity of the failure, the quality of records, and how quickly ownership can be verified. Some claims are paid quickly, while others take longer if records must be reconstructed.
The broker or platform's records may be used to confirm your entitlement and the amount held, especially if the savings provider's own records are incomplete or unavailable.
Usually, compensation is based on what you still had in the failed provider at the point of failure. If money was withdrawn before the failure, it may not be covered, unless special circumstances apply.
It may cover eligible principal and any interest that was due or accrued up to the relevant cut-off date, subject to the scheme rules and the verified balance at the time of failure.
You should ask for the reason in writing, check the scheme rules and provider status, gather supporting evidence, and consider escalating the issue to the administrator or ombudsman if one is available.
Some business customers may be eligible, but eligibility depends on the legal status of the customer, the product type, and the compensation scheme's specific rules and exclusions.
They may be covered if the underlying beneficial owner is protected and the arrangement is recognised by the compensation scheme, but nominee structures can require extra verification of ownership.
Compensation is usually assessed separately for each failed provider, with each claim measured against the applicable limit for that provider and the eligible holdings linked to it.
Yes, there is often a review or appeal process. You should provide any missing evidence and explain why you believe the decision is wrong according to the scheme rules.
That depends on where the savings were legally held and which entity is responsible. If the platform fails but the underlying savings provider remains solvent, compensation may follow different rules or may not be needed.
You can review the product terms, check whether the provider is covered by the relevant compensation scheme, confirm how the broker or platform holds the funds, and keep records showing the underlying savings provider and account details.
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