Compensation Schemes

Last updated: August 2026

Government-backed compensation schemes provide a safety net for investors when authorised financial firms fail — but every scheme covered here shares one critical limit: none of them cover you if the firm was never authorised in the first place. This guide covers the major schemes worldwide, what they cover, and how to make a claim.

UK — Financial Services Compensation Scheme (FSCS)

The FSCS is the UK’s statutory compensation scheme for customers of failed, FCA-authorised financial services firms.

  • Investments: up to £85,000 per person, per firm
  • Pensions: up to £85,000 per person, per firm
  • Insurance: 90–100% of claim value, depending on policy type
  • Cost: free to claim, at fscs.org.uk
  • Limitation: only covers FCA-authorised firms

US — SIPC and FDIC

Two separate schemes cover different things. SIPC (Securities Investor Protection Corporation) protects customers of SIPC-member broker-dealers if the firm fails financially:

  • Up to $500,000 per customer
  • $250,000 sub-limit for cash claims
  • Does not cover investment losses from market movements or fraud at a firm that remains solvent
  • Only covers SIPC-member firms — visit sipc.org

Separately, FDIC insurance covers bank deposits — not brokerage assets — up to $250,000 per depositor, per bank.

EU — Two Separate Directives

Each EU member state operates compensation schemes under two EU-wide directives, covering different things:

  • Investor Compensation Schemes Directive: a minimum of €20,000 per investor, per firm, when an authorised investment firm cannot return client assets
  • Deposit Guarantee Schemes Directive: a minimum of €100,000 for bank deposits

Some member states set higher national minimums than these EU floors. Contact your national competent authority (NCA) for your country’s specific scheme details. Neither directive covers losses from investment decisions.

Australia — AFCA and the CSLR

Australia doesn’t have a single scheme directly equivalent to FSCS or SIPC, but two mechanisms work together:

  • AFCA (Australian Financial Complaints Authority) can award compensation of up to AU$1.085 million against a firm that’s still operating.
  • CSLR (Compensation Scheme of Last Resort), live since April 2024, pays up to AU$150,000 per claim when an AFCA award goes unpaid — including because the firm has become insolvent — but only for complaints about personal financial advice, securities dealing, credit provision, or credit intermediation. The AFCA process must be completed first before a CSLR claim can be lodged.
  • Some managed funds carry their own separate compensation arrangements outside both of these.

Important Limitations

Every scheme above shares the same core limitations:

  • They only cover authorised/licensed firms — never unlicensed scammers
  • None cover investment losses from ordinary market movements
  • Coverage limits apply per person, per firm — not per account or per investment
  • Claims must be submitted within specific time limits
  • Fraudulent firms operating without authorisation are not covered by any scheme on this page

This is why verifying a platform’s regulatory status before investing matters more than knowing any compensation limit — see our Methodology for the registers we check.

Frequently Asked Questions

Does any compensation scheme cover crypto investments? Generally no. Most crypto platforms fall outside the authorisation regimes these schemes are built around, so there’s usually no compensation scheme to fall back on if one fails or turns out to be fraudulent.

Am I covered if I invested with an unlicensed or unauthorised firm? No. This is the single most important exclusion across every scheme on this page — they protect you when an authorised firm fails, not when you’ve chosen an unauthorised one. Verifying authorisation before investing is the step that actually protects you.

How do I know which scheme applies to me? It depends on where the firm was authorised, not necessarily where you live. Check the relevant regulator’s register to confirm the firm’s authorisation and jurisdiction, then refer to that jurisdiction’s scheme above.

Can I claim compensation for investment losses, not just firm failure? No. Every scheme here compensates for an authorised firm’s failure to return your assets or deposits — not for market losses or poor investment performance.

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