Are SIPP's covered for more than 85K?

tribetown

I am below that amount but am thinking ahead.

I am with ii and did Google it and it would appear that if ii fails I would still have all my investments.

"Interactive Investor Services Limited is an investment firm and not a bank. Unlike a bank, your assets are never mixed with those of ii – they are kept in legally separate trusts solely for your benefit. A bank takes your money and uses it to issue mortgages and credit cards, and to speculate on the markets; ii purely administers your assets on your behalf. We do not lend your money. We do not trade.

customers benefit from FSCS protection.

Any investment you have has “trust status”, which means that in the event of the firm becoming insolvent your investments are protected from the firm’s creditors."

Linton

If II or any other similar company or fund manager failed you would still legally own all your investments.  The companies involved in their management merely have the rights necessary to manage them. This does not entitle the management companies or their creditors to use the money for their own benefit.

One theoretical problem is fraud - eg if II is not really buying the funds you thought you were buying.  But the likelihood for this to happen unnoticed in a mainstream regulated investment company is extremely small.

If anything did happen the responsibility for restoring you to the position you should have been in would fall on II.  The £85K limit would only apply if II was unable to meet its obligations.

The biggest problem could be how quickly you could access your investments.

Many people, including myself, have a lot more than £85K in their investment accounts and still sleep soundly at night.

sandsy

Personal pensions, including SIPPs, which are issued by insurance companies are 100% protected by FCSC. For non-insured pensions, it's more complicated. 

tribetown

Thank-you both for the replies, I appreciate it.

Albermarle

sandsy said:

Personal pensions, including SIPPs, which are issued by insurance companies are 100% protected by FCSC. For non-insured pensions, it's more complicated. 

I think that if you have a traditional personal or workplace pension with an insurance company ( like Scottish Widows for example) then you are 100% covered, although it has never actually been tested in practice.
If you have a SIPP with them ( and this is increasingly the way it is going) that includes non insured funds from other providers, you are probably not covered 100% . It is a grey area anyway.