FSCS: Claims for compensation rise

Posted on July 4th, 2011 | Categories - Financial News, Savings

Financial Services Compensation SchemeNewly released figures show that claims to the Financial Services Compensation Scheme (FSCS)  have risen by 25% in 2010/11.

The FSCS scheme is compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading the FSCS may be able to pay compensation to its customers.

Claims

The latest annual report from the FSCS showed that during the 2010/11 period there were 39,500 new claims made by savers and investors.

During the same period £535m was paid out in claims. much of this was down to the collapse of Keydata. 27,000 claims made were made by ex Keydata clients with a total of £214m paid to former investors.

PPI

The FSCS scheme is also experiencing a larger number of claims due to PPI (Payment Protection Insurance) miss selling. 20% of claims in the 2010/11 year have been over PPI and this number is expected to rise.

Compensation levels

For people who had their savings with failed banks or building socities the maximum which can be claimed is £85,000 per person per institution.

For investment products the first £50,000 per person per firm is covered.

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