£85k FSCS limit - stocks and shares ISAs?

What_time_is_it

Hi there.
My partner and I each have around £60k in cash ISAs. We have used our allowance for this year and we want to transfer all of it, plus our £20k allowances for 2025/26 in April, to stocks and shares ISA. We will get interest payments at the end of March 2025 which will push up our total cash ISAs to over £64k each. So when we add on the extra £20k in April we will both be very close to the £85k protection limit.

Does the £85k FSCS limit apply to S&S ISAs in the same way as savings accounts and cash ISAs etc?

Would you recommend splitting our investments with different providers to ensure the we stay below the £85k limit?

Sorry if this is obvious stuff!

zagfles

I don't think most people worry about FSCS limits with investments on a platform, as they're fundamentally different to having money in a bank account. Money in a bank account is the bank's money, you're a creditor, the bank makes use of that money to make themselves money, ie by lending it to other people. So there's a risk that if the bank went bust without enough assets to pay the creditors, ie people who have a savings account with them, then people could lose money. Hence FSCS protections is important. 

With investment platforms, the shares etc should be held in trust and ringfenced from the platform provider's assets. The platform provider does not make use of your investments for their own purposes like banks do with savings accounts. That's why banks pay you (ie interest) for use of your money, whereas platforms charge you, for looking after your assets. If the investment platform went bust, their creditors have no claim on your investments. Theoretically if a massive fraud occurred there might be an issue, but I suspect that's unlikely to happen on a large enough scale to wipe out a big platform. 

Obviously if the underlying investments do badly, there's no protection, that's the nature of investing in stocks and shares. 

jimjames

What_time_is_it said:

Does the £85k FSCS limit apply to S&S ISAs in the same way as savings accounts and cash ISAs etc?

Would you recommend splitting our investments with different providers to ensure the we stay below the £85k limit?

No it doesn't apply in the same way. And no I wouldn't recommend splitting to stay below the limit. Many people have way above that limit without worrying about issues. Performance of the investments is the bigger risk you need to consider.

dunstonh

Does the £85k FSCS limit apply to S&S ISAs in the same way as savings accounts and cash ISAs etc?

No. With a bank, you are giving the bank your money.  So, their solvency is vital to you getting the money back.

With investments, the provider is just an administrator.   Their solvency is not linked to you getting the money back.

FSCS protection only really covers you if you go off the beaten track and start using obscure options or small players/non mainstream.   Failures in those areas can take a while to sort and having a backup is useful.  However, if you stick to mainstream players (e.g. platforms that are profitable and do not have high volumes of illiquid assets on them) then it should never be an issue.