Pension FSCS Protection

ShineChimeDime

I understand that DC pensions are protected up to a limit of £85k per financial institution.

When you consider that one might require a DC pension pot totalling hundreds of thousands of pounds (or more), the £85k protection feels like a drop in the ocean and barely protection at all.
What are the usual ways that people protect their pension funds please?
If we imagine a total DC fund of £1.5m by the time one retires, splitting that into 18 different financial institutions feels like an almost impossible and impractical way to manage it.

zagfles

Search this board for FSCS, it's discussed all the time. Basics are it's completely different to a bank account, where the bank use your money to lend out etc and if the bank goes bust you're a creditor, so FSCS protection is important. A scheme like a pension just administers assets which remain beneficially yours, so if the pension provider goes bust, they can't use your assets to pay their debts.

Albermarle

Pensions using insured funds , like Standard Life, Aviva, Scottish Widows, have unlimited protection , so if you are worried use one of these pensions . They tend to be less competitive and are restricted to investing in their own funds only .
However as Zagfles said , you probably have very little to worry about with any mainstream provider. If you have a very large pot then most people seem to split it up between two providers, mainly in case of a major IT meltdown .

ShineChimeDime

That's great, thanks for the info