Educational Guide

What Is an FSCS Pension Claim? A Complete Guide

The Financial Services Compensation Scheme (FSCS) is the UK's statutory fund of last resort. If the financial firm that gave you pension advice or operated your SIPP has failed, the FSCS may compensate you for your losses — up to defined limits. This guide explains how the FSCS works, who qualifies, and how to make a claim.

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FSCS Pension Claims Explained

How the FSCS Protects Pension Savers

What Is the FSCS?

The Financial Services Compensation Scheme (FSCS) is a statutory body created under the Financial Services and Markets Act 2000. It provides a safety net for customers of UK-regulated financial firms that have failed and are unable to pay claims against them.

The FSCS is funded by levies on the financial services industry. It operates independently of the FCA and government and makes compensation decisions based on its own assessment of each claim under a defined set of rules.

Who Can Claim?

You can make an FSCS claim if: (1) you dealt with a firm authorised by the FCA; (2) that firm has been declared in default (failed); and (3) you have suffered a financial loss as a result of the firm's failure or misconduct.

  • Private individuals (retail clients)
  • Small businesses in some cases
  • Claimants whose IFA or SIPP operator has been declared in default

You cannot claim against unregulated firms or introducers through the FSCS. Claims must be against FCA-authorised entities.

What Are the Compensation Limits?

FSCS compensation limits vary depending on the type of claim and the date of the failure:

  • Investment advice claims (e.g. pension transfer advice): 100% of proven loss — no upper cap for advice claims where the adviser gave regulated advice
  • SIPP operator claims (classified as Investment Provision): up to £85,000 per eligible person per firm
  • Insurance-based pension products: up to £85,000 (100% of first £85,000)

Important: For pension advice claims, the FSCS covers 100% of the loss with no cap. For SIPP operator claims, the £85,000 cap applies. Many claimants have both an adviser claim (uncapped) and an operator claim (capped), and should pursue both.

How Does the FSCS Declare a Firm in Default?

A firm is declared in default when the FSCS is satisfied that it is unable to pay claims made against it. This is typically triggered when the firm enters administration, liquidation, or ceases to trade without being able to meet its obligations.

Once declared in default, the FSCS opens its claims service for that firm. You will need to submit a claim through the FSCS website (fscs.org.uk) or by post, providing supporting evidence of your loss.

How Long Does an FSCS Claim Take?

Straightforward FSCS claims can be resolved within a few months. More complex cases — particularly where there are multiple parties, SIPP operator investigations, or impaired assets — can take significantly longer. The FSCS's investigation into Gaudi Regulated Services, for example, took approximately three years from administration to declaration of default.

The FSCS aims to pay compensation as quickly as possible once it has completed its investigation and confirmed that claims are eligible under its rules.

Your Four Routes

How to Pursue a Pension Mis-selling Claim

Regardless of the specific product, the same four-route framework applies to most UK pension mis-selling claims.

Route 1

Direct Firm Complaint

Complain directly to the financial firm that advised you or operated your pension. The firm has eight weeks to respond under DISP rules.

If firm is still trading
Route 2

Financial Ombudsman Service

If the firm rejects your complaint or fails to respond within eight weeks, escalate to the FOS. Award limits: £455k (post-Apr 2019 advice), £200k (pre-Apr 2019).

Free escalation route
Route 3

FSCS Compensation

If the firm has failed and been declared in default by the FSCS, you can claim compensation directly. Cap: £85,000 per eligible person per firm (investment advice).

For failed firms
Route 4

Civil Litigation

Where FSCS caps leave a material shortfall, civil litigation through SRA-regulated solicitors can pursue uncapped recovery, particularly under FSMA s.27 and the Fletcher [2024] precedent.

Uncapped — no FSCS limit
Questions

Frequently Asked Questions

Do I need to use a claims management company to make an FSCS pension claim?
No. You can make a claim directly to the FSCS at fscs.org.uk, free of charge. You do not need to use a claims management company or solicitor, and using one will not improve your chances of success. Using Redress Advisory does not improve the likelihood of a successful claim — but we can help you identify all eligible claims and ensure the correct evidence is submitted.
What if my losses exceed the FSCS cap?
Where your loss exceeds the FSCS compensation limit — particularly in SIPP operator claims where the cap is £85,000 — you may be able to pursue the residual shortfall through civil litigation against solvent parties in the advice chain (Route 4). Redress Advisory's route assessment includes analysis of shortfall recovery options.
Can I make FSCS claims against more than one firm?
Yes, subject to anti-duplication rules. If both your IFA and your SIPP operator have failed, separate FSCS claims against each are generally available. Compensation paid on one claim is taken into account in calculating any award on another, but you are not prevented from pursuing both.
The FSCS says my firm is 'under investigation' — what does that mean?
When a firm enters administration, the FSCS investigates whether valid claims exist before declaring the firm in default and opening its claims service. This investigation can take months to years. During this period, you can submit a claim to assist the FSCS's investigation, but compensation will not be paid until the investigation is complete and the firm is declared in default.
What if my adviser was an unregulated introducer?
The FSCS only covers claims against FCA-authorised firms. If you were introduced to a SIPP by an unregulated introducer and suffered losses, your FSCS claim should be directed at the regulated SIPP operator (for due diligence failures) or any regulated IFA in the chain — not against the unregulated introducer.
Important

Time Limits Apply

⚠ Act Promptly

FSCS claims have no fixed expiry date in most cases, but Limitation Act provisions apply to any underlying civil claim. Some FSCS investigation timelines also create de facto time pressure. Do not delay — visit redressadvisory.com/time-limits for a full analysis of the time limits that apply to your specific situation.

View our full guide to pension claim time limits →

Get a Free Claim Assessment

Redress Advisory helps individuals assess their pension mis-selling position across all four routes, backed by SRA-regulated solicitors.

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Regulatory Notice & FCA Self-Service Disclaimer

You do not need to use a claims management company to pursue a pension mis-selling complaint. You can complain directly to the financial firm, escalate to the Financial Ombudsman Service (FOS), apply to the Financial Services Compensation Scheme (FSCS), or instruct a solicitor independently — all free of charge. Using Redress Advisory does not improve the likelihood of success compared to pursuing a claim yourself, and our fee will reduce any compensation you receive.

Redress Advisory Ltd (Company No. 17295681) is a claims management company. Regulated legal work is carried out by our Operating SRA Partner solicitor firms. We are not a firm of solicitors and we do not provide legal advice.

The information on this page is for general informational purposes only. It does not constitute financial, legal, or claims management advice. Individual outcomes depend on the specific facts of each case. Historical outcomes in related cases are not a guarantee of results in your case.

FOS: 0800 023 4567  |  FSCS: 0800 678 1100  |  FCA Register: register.fca.org.uk