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How are your pension investments protected by legislation?

In addition to the protection under the Pension Protection Fund for final salary schemes, a level of additional cover is provided by the Financial Services Compensation Scheme (FSCS) for money purchase schemes.

FSCS will pay compensation if a product provider is unable to pay claims against it. This will generally be because it has stopped trading and has insufficient assets to meet claims, or is insolvent.

Stakeholder pensions, personal pensions and annuities are often thought of as investment products. In reality, they are usually long term insurance contracts. That means, were the firm providing the annuity to fail, the FSCS limit for long term insurance would apply, providing protection to 100% of the claim, with no upper limit. Most types of claimants are eligible to make such claims in respect of long-term insurance contracts, but whether protection applies can also be effected by where claimants were living when they took out the product.

Self-Invested Personal Pensions (SIPPs) are a type of ‘wrapper’ for a bundle of different financial products. These products can include insurance, investments or deposits. SIPPs can be provided directly by a SIPP manager or by fund managers, banks, building societies or insurance companies. If the provider of an underlying product held within the SIPP fails, the FSCS compensation limit depends on the type of product held within the SIPP. There are separate sub-schemes for different types of deposits and investment business. Cash deposits are covered up to £85,000 and investments up to £85,000.

FOR INVESTMENT ADVICE REGARDING YOUR PENSION OR OTHER INVESTMENTS PLEASE CONTACT Elliott Wilson ACSI DipPFS AF3

 

While we keep information on the website as up to date and as accurate as possible, the information on this website does not form part of our advice process. Cambridge Pensions Ltd cannot accept any liability for any decisions made by a client or member of the general public based on any information contained on this website. The value of your investments can go down as well as up and you may get back less than has been paid in.

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