FSCS Compensation for Investments

musehead

I understand the FSCS compensations limits for investments are:

Investments: £48,000 per person.

100% of the first £30,000 and 90% of the next £20,000.

http://www.fscs.org.uk/consumer/key_facts/limitations_of_the_scheme/compensation_limits/

I'm considering expanding my portfolio in Hargreaves Lansdown to well over £50k. Should I be worried? What would happen exactly if H-L went bust, considering my money is actually held by the relavent funds rather than H-L itself?

dunstonh

Should I be worried?

Not if you are using unit linked investments.

What would happen exactly if H-L went bust

Its hard to say but a number of options are available but all of them involve your money being safe above the limit. Your units are ringfenced away from the assets of the administrator. you would either find the invesmtents are encashed and returned to you as a cash payment or more likely a new adminstrator would buy the book and take over (which has happened in the past with other unit linked investments).

The FSCS limits are different for life fund investments and personal pensions (which have no cap) but not SIPPs (unless its an insured SIPP or makes use of insured funds).