New Compensation Limits

On 1 January 2010 the compensation limits for investment, insurance and home finance intermediation claims are changing. The new limits will apply to claims against firms declared in default on or after 1 January 2010 following a rule change announced by the FSA earlier this year.  

Compensation limits for investment and home finance advice and arranging claims will increase to £50,000, bringing the compensation limit for these classes in line with the limits for deposit claims. Compensation for non-compulsory insurance will be paid at 90%, with no upper limit. Cover for compulsory insurance will remain at 100% protection with no upper limit. The new limits will make it easier for consumers to understand the cover the FSCS provides.

Overview 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. 

By Thomas Chen
01 January 2010