Do you know if your investments are protected?

With returns on cash at all time record lows and more people considering investing in stocks and shares, new Which? research reveals the majority of the public aren’t aware of the safeguards in place should the worst happen to their investments.

The collapse of a financial firm is every investor’s worst nightmare, yet Which? has found the majority of people don’t know about the protection in place to guard against investors losing everything if an authorised investment firm goes out of business or they receive bad advice.

Our research found:

  • Two-thirds (67%) of people know that deposits with a bank or building society are protected.
  • Only 32% of people realise that investments fall under the remit of the Financial Services Compensation Scheme.
  • Just 4% of people know the maximum level of compensation is £50,000 per investment firm.

The compensation rules for investments are more complicated than they are for bank deposits, but investment firms, The Financial Conduct Authority and the FSCS aren’t doing enough to help improve understanding of the protections in place for investors.

Harry Rose, Editor of Which? Money, said:

“With record low returns on cash savings, more people will be turning to other types of investments and should know there is a safety net in place should the worst happen. Investment firms, the regulator and the FSCS itself should be doing more to help investors understand how their money is protected.”

There is more information about the protection offered by the FSCS available at In general:

  • £50,000 FSCS protection for negligent investment and fraud. The FSCS can cover losses up to £50,000, but only if the rogue investment firm or adviser is unable to meet claims against it.
  • £50,000 FSCS protection when an authorised investment firm goes out of business and cannot return your money.
  • £150,000 ombudsman protection if the firm is still operating. The Financial Ombudsman Service will investigate your complaint and can force the financial firm or adviser to compensate you up to £150,000 plus interest.
  • No protection if your investments have performed badly. The FSCS doesn’t cover losses on the stock market – that’s the risk you take as an investor.


Notes to editors

  1. Which? research: Between 16th and 17th November 2016, we asked 1,692 people in an online survey about their knowledge of the financial protections in place for different savings and investments.

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