Compensation claims above £50,000


1. What happens if my losses are over the FSCS max of £50,000 and I accept FSCS compensation?

If you choose to accept FSCS compensation, you will be required to assign (or legally transfer) to FSCS all of your rights to claim in the administration.  FSCS will then claim in the administration instead of you and will claim for the whole of your loss, even if it was over £50,000. When FSCS receives the dividends in your place it will then pay back to you any amounts that you would otherwise have received if you had accepted the dividends before claiming on FSCS.  Our rules require that you are no worse off whether you claim from us first or whether from the administrator first.

Example 1

  • Loss = £80,000
  • FSCS compensation = £50,000
  • Dividend of 50p/£ received from FSCS by FSCS = £40,000
  • FSCS pays £30,000 to claimant so he is fully compensated (total £80,000), and retains £10,000 recovery for itself

Example 2

  • Loss = £100,000
  • FSCS compensation = £50,000
  • Dividend of 50p/£ received from KPMG by FSCS = £50,000
  • FSCS pays £50,000 to claimant so he is fully compensated (total £100,000), and retains nothing for itself

FSCS does not have to have made a full recovery of its £50,000 before it starts paying its dividend recovery on to claimants.

Claimants are not compelled to claim on FSCS, or to accept the FSCS offer of compensation.  If you do not want to assign (transfer) your KPMG administration claim to FSCS in exchange for the compensation, then you can refuse FSCS compensation and continue your claim in the administration. After you have received the dividend(s) you can return to FSCS to claim for any remaining shortfall.

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