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Investment compensation limits
balooney2000
Posts: 80 Forumite
Can anyone explain the compensation limits regarding investment amounts with a particular provider.
If I have an stocks & shares isa, my partner has an stocks & shares isa, we have a joint investment account, and a pension invested in a various funds, all with the same provider - what are the compensation limits if the provider went bust? Would we be covered for each account (ie 4 accounts in all)?
If I have an stocks & shares isa, my partner has an stocks & shares isa, we have a joint investment account, and a pension invested in a various funds, all with the same provider - what are the compensation limits if the provider went bust? Would we be covered for each account (ie 4 accounts in all)?
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Comments
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There is no need for any compensation limit if a provider goes bust. Your funds are held separately and would not be affected by the provider stopping trading. A new provider would carry on the business.
In the event of fraud or some other event that does require compensation you are covered to £50k each. But it would be extremely unlikely that all the funds would be with the same provider - that would be very poor investing as different fund managers specialise in different areas of the market.Remember the saying: if it looks too good to be true it almost certainly is.0 -
If the pension and both isa's are invested in the same fund of funds, and the joint account invested into a different fund of funds would this make a difference?0
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The risks, beyond the standard investment risks, of holding funds are virtually zero as long as you are talking about funds run by authorised and regulated fund managers held through someone authorised and regulated to do so. Yes you can invent wild conspiracies that could in theory cause problems but really the situation is very different to the banks where your savings are part of the banks' assets. Funds and the shares they invest in do not form part of any of the operational companies' assets and so are not at risk of seizure should the companies fail.
I and many other people are perfectly happy to hold £100Ks of investments with individual providers whereas we would be careful not to hold more than £85K in cash with any one bank.0 -
Minor correction needed to the last word:the situation is very different to the banks where your savings are part of the banks' [STRIKE]assets[/STRIKE]
"... balance sheet".
They are liabilities, not assets.0 -
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