• 
• 
• 
• 

Investor Protection

Autumn 2007

Question: In view of recent events in the banking sector, what are my legal rights if my bank or other provider cannot meet its obligations?

Answer Investor protection is mainly provided by the government's Financial Services Compensation Scheme. How much you get depends on the type of investment.

• UK banks and building society deposits , following the run on the Northern Rock, are now covered up to £35,000. Until the recent change in the rules, the maximum pay-out was £31,700 for deposits of £35,000 or more. The Chancellor, Alistair Darling, has suggested that these limits will almost certainly rise higher.
• UK investment products, such as units trusts or OEICs that were sold after 27 August 1988 are 100% covered for the first £30,000 and 90% covered for the next £20,000 making the maximum pay-out of £48,000 on £50,000 of investments.
• UK life assurance policies are covered for 100% of the first £2,000 and 90% therafter, with no cash ceiling, although the 90% figure could be cut back if an independent actuary considered the original benefits were excessive.