FSCS stakeholders

Building consumer awareness and understanding – and industry engagement

Increased consumer awareness of FSCS has the potential to build better understanding, knowledge and –ultimately – greater trust in the UK’s financial service industry. This is as important as ever.

We have maintained overall UK adult awareness of FSCS and deposit protection at 79 per cent. Last year we reached an agreement with deposit takers to use the FSCS Protected badge alongside their own logo on the
information sheet required under the Deposit Guarantee Schemes Directive, as well as online, in their mobile apps and in advertising. This was part of an initiative to help raise awareness of our deposit protection amongst UK consumers. Deposit takers have until March 2019 to fully implement the agreement. From our research so far, many firms are already compliant, which is very encouraging.

But we want awareness of the full range of FSCS protection to be higher.

To drive wider financial stability, FSCS will continue to need industry support alongside our own marketing communications programmes, so that FSCS protection is part of people’s financial decision making.

In March 2018, FSCS published the findings of a large-scale behavioural experiment which showed a link between the choices people make in retirement and their awareness of FSCS. In a nutshell, those aware of FSCS were less inclined to buy riskier products and more inclined to opt for those the Scheme protects. They were also more likely to take advice and less likely to question the cost of that advice.

Despite this, our mystery shopping exercise showed a clear gap in the quality of information firms are providing to their customers about FSCS. For example, 61 per cent of mystery shoppers had to proactively prompt an adviser for information about the Scheme. The overall awareness score on the compensation limit for pensions was only 23 per cent.

Raising awareness of our broader coverage is an important issue and working with industry is one of the ways in which this can be achieved. Our recently founded pensions working group is an example of FSCS and industry working collaboratively to resolve such an issue.

Raising awareness of our broader coverage is an important issue and working with industry is one of the ways in which this can be achieved. Our recently founded pensions working group is an example of FSCS and industry working collaboratively to resolve such an issue.