The FSCS will be triggered automatically and will pay compensation to customers of the firm without contacting them first.
We will do our best to deal with claims as quickly as we can. How long this takes depends on the type of claim. We will aim to pay compensation in the majority of cases within seven days of a bank, building society or credit union failing. We will aim to pay any remaining claims, which are likely to be more complex, within 20 working days.
If any depositor is facing particular hardship we will try to prioritise their claim.
When we pay a claim we take an assignment of rights which gives us the right to try and recover money from the failed firm to reduce the cost of compensation to levy payers.
Payment of compensation is usually made by cheque or cash over the counter at Post Offices. The majority of claims will be paid in sterling.
The compensation limit for deposit claims is £85,000*. The limit applies per depositor per institution and covers deposits made in all currencies. Each depositor is entitled to compensation up to this amount, whether the deposits are in sole or joint accounts.
*From 3 July 2015, the FSCS will provide a £1 million protection limit for temporary high balances held with your bank, building society or credit union if it fails. Read our Q&As about temporary high balances for more information.
For claims against firms declared in default between 1 January 2016 and 29 January 2017, the maximum level of compensation was £75,000.
For claims against firms declared in default between 31 December 2010 and 31 December 2015, the maximum level of compensation was £85,000.
For claims against firms declared in default between 30 June 2009 to 30 December 2010, the deposit compensation limit is the higher of £50,000 or €50,000. In the event of default, the Euro amount will be calculated by reference to the currency exchange rate on the day of default.
For claims against firms declared in default between 7 October 2008 and 29 June 2009, the maximum level of compensation is £50,000 (100% of the first £50,000).
For claims against firms declared in default between 1 October 2007 and 6 October 2008, the maximum level of compensation is £35,000 (100% of the first £35,000).
For claims against firms declared in default before 1 October 2007, the maximum level of compensation is £31,700 (100% of the first £2,000 and 90% of the next £33,000).
The Financial Conduct Authority website includes a searchable database of all firms authorised and regulated by the FCA and the Prudential Regulation Authority (PRA).