FCA proposes £85,000 FSCS investment protection limit

Up from current £50,000 cap

The Financial Conduct Authority (FCA) has proposed increasing the investment protection limit for consumers from the Financial Services Compensation Scheme (FSCS) by almost two-thirds to £85,000.

The proposed new limit would represent a 65% increase on the current £50,000 cap, with the FCA arguing the higher figure would balance the need for an affordable increase against the need for improved consumer protection in light of pensions freedoms. It said £85,000 was a "reasonable" limit after it considered increasing the compensation cap to £75,000, £100,000, £150,000 and £1m in the consultation it published in December 2016. The FCA also said it had considered whether the current £50,000 compensation limit offered consumers enough protection in the context of financial advice an...