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.