The FSCS route
If your former adviser firm has failed and is on the Financial Services Compensation Scheme's list, your claim doesn't go to the firm — it goes straight to the FSCS, the UK's statutory compensation fund of last resort. The FSCS is free for you to use and pays compensation directly to consumers.
What to expect, step by step
- 1. Letter of Authority signedDay 0
You sign a digital Letter of Authority so we can request your pension records, the original advice file and scheme data on your behalf. Nothing is submitted to the FSCS until this is in place.
- 2. Evidence gatheringWeeks 1–6
Because the adviser firm has failed, there is no firm to write to. We instead reconstruct the case file from the ceding scheme administrator and your current SIPP/QROPS provider — requesting the suitability report, fact-find, transfer value analysis and the original transfer pack. Provider turnaround typically runs 2–6 weeks.
- 3. FSCS portal account openedWeek 6
We open or update the claim record on the FSCS Pension Claims portal on your behalf, attach the Letter of Authority and register the failed firm so the file is ready to receive the submission pack.
- 4. Loss assessment & case buildWeeks 4–8
Using FCA-prescribed methodology, we calculate the cost today of buying back the secure income you gave up and compare it with your current pension value. The shortfall — capped at £85,000 per claim under the FSCS limit — forms the basis of your claim pack.
- 5. FSCS submission & adjudicationTypically 6–9 months from submission
We submit the full claim pack to the FSCS via their Pension Claims Service. An FSCS claims handler reviews liability and quantum, may request further information and ultimately issues a decision. Most decisions land in the 6–9 month window, though complex cases can take longer.
- 6. Compensation paid directly to youWithin ~28 days of a successful decision
If your claim is upheld, the FSCS pays the compensation directly into your nominated account or, where appropriate, into a pension. Our success fee only becomes payable once you have received the funds.
Why the FSCS upholds these claims
The FSCS handles claims against authorised firms that have failed. For unsuitable Defined Benefit pension transfer advice, the same regulatory standard applies as if the firm were still trading — and the same recurring failures show up across upheld claims.
“Where the failed firm cannot evidence that the transfer advice was suitable, the FSCS will compensate the consumer for the loss caused.”
FSCS adjudicators apply the same FCA suitability tests as the Ombudsman. Advisers routinely failed to give proper weight to guaranteed, index-linked income and spouse's benefits — the secure features of a DB scheme that the regulator treats as generally superior to a personal pension.
Where the surviving advice file shows a cautious investor, limited capacity for loss, or no genuine need to access the fund early, the FSCS commonly concludes the transfer was unsuitable — and a loss has therefore occurred.
Many transfers required investment returns of 6–8% per year just to match the original DB benefits. The FSCS treats these as a clear marker that the recommendation was unlikely to be in the client's best interest.
When a firm has failed, suitability files are often patchy or missing entirely. Under FCA rules the burden is on the firm to evidence suitable advice — gaps in the file weigh in favour of the consumer, not against them.
The FSCS doesn't water down the standard of advice required. It applies the same FCA Handbook rules (COBS, PRIN) and the same DISP App 4 redress methodology that the Ombudsman would have used had the firm still been trading.
The FSCS exists specifically to compensate consumers when an authorised firm has failed and can no longer meet its liabilities. It is funded by an industry levy — there is no cost to you.
Compensation is capped at £85,000 per person, per failed firm, per pension claim. Where the actual loss is higher, the FSCS pays up to the cap — the shortfall above is unrecoverable from the failed firm.
Even though the firm no longer exists, the regulatory burden to demonstrate suitable advice doesn't disappear. The FSCS works through the surviving evidence and, where it cannot positively justify the transfer, finds in the consumer's favour.
Sources: FCA Handbook DISP App 4 redress methodology; FSCS — what we cover: pensions; FSCS compensation limits.
Things worth knowing
- £85,000 cap per claim. The FSCS can award up to £85,000 per person, per failed firm, per pension claim. If your indicative loss exceeds the cap, compensation is limited to £85,000.
- FSCS is free for you. You pay nothing to the FSCS at any stage. We handle the submission, evidence pack and ongoing correspondence.
- Loss is calculated using FCA methodology. The FSCS works out what you'd have had if you'd stayed in your defined-benefit scheme and compares it to your pension value today. The shortfall (up to the cap) is the redress.
- Evidence is the bottleneck. Most of the elapsed time before submission is spent waiting on pension providers and the failed firm's administrators to release records. We chase weekly.
- Typical adjudication: 6–9 months. Once submitted, the FSCS aims to decide most claims within this window. Complex cases (multiple transfers, disputed liability) can take longer.
- Payment direct to you. Successful awards are paid into your nominated bank account or, where suitable, into a pension wrapper to preserve tax efficiency. This is normally within ~28 days of the decision.
- You can stop at any time. The claim is yours — you stay in control throughout.