Your pension's protection

Of all the financial products we cover, pensions are probably the most complicated. There are lots of pension options, and since the introduction of pension freedom in 2015 you can do more with your money in retirement.

If your pension provider or financial adviser goes out of business, we may be able to step in and pay compensation. But FSCS protection varies depending on the type of pension product, and there are limits to the amount we can compensate.

Answer a couple of simple questions and we'll help you find out how much protection FSCS may offer.

Answer - Final salary pension schemes are generally covered by the Pension Protection Fund.

Your final salary pension is known as a 'defined benefit' scheme. These are protected by the Pension Protection Fund. But if you're thinking of changing your pension, your new pension may not be protected. It’s up to you to find out what protection your pension has. To find out, follow the ‘Check’ steps below.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - Defined contribution work pension schemes are structured in different ways, so you’ll need to check whether you’re FSCS protected or not.

Your defined contribution workplace pension could be set up to be trust-based, contract-based, or group-based. FSCS protection would depend on how your particular scheme was set up. It’s up to you to find out what protection your pension has.

Visit MoneyHelper to learn more about this type of pension.

If you've already retired, and used the funds from a defined contribution workplace pension scheme to buy an annuity from a UK-regulated provider, FSCS protects this at 100%.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - If your FCA-regulated SIPP provider fails, funds are generally ring-fenced. Shortfalls may be FSCS protected up to £85,000.

If your SIPP provider fails, the funds are generally safe as they're ring-fenced and can't be used to pay creditors. Shortfalls in assets or money may be covered by FSCS up to £85,000.

If a firm that provided a product within the SIPP failed, FSCS may still be able to protect your money. The level of protection depends on the type of product. Investments, insurance products, or cash in a deposit account all have different protection levels.

Individual SIPPs vary, and it’s up to you to find out what protection your pension has. To find out, follow the ‘Check’ steps below.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - FSCS protection for your type of personal pension depends on the type of its investments.

If your personal pension provider fails, the funds are generally safe as they're ring-fenced and can't be used to pay creditors. Shortfalls in assets or money may be covered by FSCS up to £85,000.

If a firm that provided a product within the personal pension failed, FSCS may still be able to protect your money. The level of protection depends on the type of product. Investments, insurance products, or cash in a deposit account all have different protection levels. If your pension is structured as a 'contract of long-term insurance', protection may be 100%.

Individual personal pensions vary, and it’s up to you to find out what protection your pension has. To find out, follow the ‘Check’ steps below.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - Without knowing more, we can't tell you what protection you have.

You'll need to do some research using the organisations below.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - Good news. Our annuity protection is 100% with no upper limit.

Our annuity protection is 100% with no upper limit. Your annuity must be with a PRA-authorised insurer, as shown on the FCA register, and it must be classed as a ‘contract of long-term insurance’ to be eligible for FSCS protection.

If you’re unsure if your annuity is a ‘contract of long-term insurance’, ask your provider. Use our key questions (pdf 215KB) to help. It’s up to you to find out what protection your pension has.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - Depending on how your investments are structured, you have varying levels of FSCS protection.

If your lump sum is saved as cash with a UK bank, building society, or credit union - for example in a normal savings account - you're protected up to £85,000. Remember that the limit applies to each banking licence, and some banks share a licence across different brands. This will affect how much of your money we can protect. Use our bank and savings protection checker to check your accounts are covered.

If you’ve re-invested some of your pension pot to provide an income (known as ‘pension drawdown’), then FSCS may protect your money under our investment cover.

This type of product doesn’t provide a guaranteed income, and FSCS can’t protect you if your investments simply don’t perform as you'd hoped. We can only step in if the provider has failed and they acted negligently in some way.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Answer - Depending on how your investments are structured, you have varying levels of FSCS protection.

Our annuity protection is 100% with no upper limit. Your annuity must be with a PRA-authorised insurer, as shown on the FCA register, and it must be a ‘contract of long-term insurance’ to be eligible for FSCS protection. If you’re unsure if your annuity is a ‘contract of long-term insurance’, ask your provider. Use our key questions (pdf 215KB) to help.

Many people use their lump sum to pay off their mortgage or treat themselves to a dream holiday. If instead, you choose to invest or save it, you may be protected by our investments or deposits cover, up to £85,000.

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

Check

If you're considering getting some financial advice about your pension, search the Financial Conduct Authority (FCA) register to check that it authorises your financial advisor.

Check

If you're considering switching your pension or taking out a new one, search the Financial Conduct Authority (FCA) register to check that it authorises your new pension provider.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Check

Ask your employer about your particular defined contribution workplace pension scheme to find out if it’s FSCS protected. Or if you know the pension provider, ask them if your pension is FSCS protected.

Check

If you're considering getting some financial advice about your pension, search the Financial Conduct Authority (FCA) register to check that it authorises your financial advisor.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Check

If you're considering getting some financial advice about your pension, search the Financial Conduct Authority (FCA) register to check that it authorises your financial advisor.

Check

If you're considering switching your pension or taking out a new one, search the Financial Conduct Authority (FCA) register to check that it authorises your new pension provider.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Check

If you're considering getting some financial advice about your pension, search the Financial Conduct Authority (FCA) register to check that it authorises your financial advisor.

Check

If you're considering switching your pension or taking out a new one, search the Financial Conduct Authority (FCA) register to check that it authorises your new pension provider.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Check

Go to MoneyHelper and read up on the different types of pensions available. Its advice is free and impartial.

Check

Find out from your pension provider what type of pension you have.

Check

Come back and check your FSCS protection once you know more about your pension.

Check

Check your annuity is a 'contract of long-term insurance'.

Check

Search the Financial Conduct Authority (FCA) register to make sure your provider is authorised in the UK.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Check

If you're considering getting some financial advice about your pension, search the Financial Conduct Authority (FCA) register to check that it authorises your financial advisor.

Check

If you're considering switching your pension or taking out a new one, search the Financial Conduct Authority (FCA) register to check that it authorises your new pension provider.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Check

If you're considering getting some financial advice about your pension, search the Financial Conduct Authority (FCA) register to check that it authorises your financial advisor.

Check

If you're considering switching your pension or taking out a new one, search the Financial Conduct Authority (FCA) register to check that it authorises your new pension provider.

Check

Use our key questions (pdf 215KB) to ask any pension provider about your FSCS protection.

Maybe you’re thinking about taking out a pension. Our main pensions page includes information on how we protect different types of pension products - as our protection does vary. It can be difficult to understand at first as pensions are complicated, but if you're stuck, you can contact us for help.

We can't give you advice on your choices, but we can help you with questions about our protection and compensation limits. 

Thinking about getting financial advice?

If you’re going to seek financial advice, and the adviser is authorised by the FCA, we can protect you if things go wrong. This means if the adviser goes out of business and you’ve lost money because of the bad advice they gave you, we may be able to compensate you up to £85,000.

We also have some useful questions (pdf 215KB) that you can ask any provider if you’re considering taking out a pension with them. They’ll help you find out if FSCS can protect your money and, if so, how much. This is an important part of any financial decision.

If you need general advice about any money matters, including pensions, visit MoneyHelper – its support and guidance are free.

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