Over £1bn in compensation paid to consumers since FSCS set up

Consumers have benefited from more than £1bn in compensation from the UK’s compensation scheme of last resort since the Financial Services Compensation Scheme (FSCS) was set up.
The FSCS was set up in December 2001 following the Financial Services and Markets Act 2000 (FSMA). Since then FSCS has helped consumers who had nowhere else to turn when authorised financial services firms went down.

Funded by levies on firms regulated by the FSA, the compensation paid by FSCS since 2001 stands at £1.025 billion.

FSCS has made some 350,000 compensation payments across the full range of financial services. It has stepped in to help customers of firms of all shapes and sizes, from small independent financial advisers and credit unions to much larger companies like Independent Insurance.

Loretta Minghella is the Chief Executive of the FSCS. She says the organisation is working hard for consumers and the industry. “We have reached a significant milestone for consumers, the industry and FSCS. More than a billion pounds has now been paid to people who otherwise would have had nowhere else to turn for help.

“During the last six years, FSCS has worked hard to make sure that people got the compensation they were due. We have made over 250,000 payments to consumers relating to significant insurance failures. We have upheld over 54 thousand mortgage endowment claims. We have helped over 4 thousand credit union members to get their savings back. And we have helped thousand of investors who lost money from precipice bonds and splits. Our work has spanned the full breadth of financial services. The £1 billion that we have paid is money that consumers would have lost if it was not for FSCS.”