FSCS Pension Compensation Limit: How Much Can You Claim?
Nadeem Pervazis a solicitor at Edward & Amaury Solicitors, a law firm authorised and regulated by the Solicitors Regulation Authority. Content is reviewed for legal accuracy and compliance with FCA guidance and SRA conduct standards.
TL;DR — Quick Summary
- ▸The FSCS compensation limit for pension mis-selling claims is £85,000 per person per failed firm.
- ▸The limit applies to claims for regulated investment advice — including pension transfer and SIPP advice.
- ▸If two separate firms both failed and both gave you bad advice, you may be able to claim up to £85,000 from each.
- ▸If your loss exceeds the limit, a solicitor can help you explore whether other parties in the advice chain are also liable.
- ▸The Financial Ombudsman Service has a higher limit (£415,000) but only applies where the adviser firm is still trading.
If your pension was mis-sold by a firm that has since failed, the Financial Services Compensation Scheme (FSCS) may be able to compensate you. But the FSCS applies a cap on how much it will pay. This page explains the current FSCS pension compensation limit, how it works in practice, and what your options are if your loss exceeds it.
Quick Answer
The current FSCS limit for pension mis-selling claims is £85,000 per person per failed firm. If your loss is higher, or if multiple firms were involved, there may be other routes to pursue the full amount. A solicitor can advise on your specific situation.
What Is the FSCS Compensation Limit for Pension Claims?
The FSCS compensation limit for protected investment business — the category that covers regulated pension advice — is currently £85,000 per eligible person per failed firm. This means that if you suffered a pension loss due to bad advice from a firm that has since failed, the FSCS will pay up to £85,000 to compensate you.
The limit is set and periodically reviewed by the Financial Conduct Authority (FCA). We recommend checking the FSCS website for the current figure, as it may change. For context, the limit was increased from £50,000 to £85,000 for claims relating to advice given from 1 April 2019.
| Scheme | Current Limit | Applies When |
|---|---|---|
| FSCS | £85,000 per person per firm | Adviser firm has failed / insolvent |
| Financial Ombudsman (FOS) | £415,000 (post-Apr 2019) | Adviser firm is still trading |
| Court / Legal action | No cap — full loss recoverable | Any situation — via litigation |
How Does the Limit Apply in Practice?
The £85,000 cap applies to the compensation paid, not to the loss assessed. So if the FSCS assesses your pension loss at £120,000, it will only pay £85,000. The remaining £35,000 would not be covered under the FSCS unless other avenues exist.
The limit is applied per firm. If you received bad pension advice from two separate FCA-authorised firms — for example, an IFA and a SIPP operator — and both have failed, you may be able to make separate claims against each, potentially recovering up to £85,000 from each.
What If My Loss Exceeds the FSCS Limit?
If your pension loss is greater than the FSCS compensation limit, you have several options to consider:
- Claim against other parties in the advice chain: In many cases, more than one firm may share responsibility — for example, an introducer, an IFA, and a SIPP operator. If any of those firms are still trading, you may be able to pursue them through the Financial Ombudsman Service.
- Legal action: Court proceedings are not subject to the FSCS cap. If another party caused or contributed to your loss and is solvent, legal action may allow you to recover the full amount.
- SIPP operator liability: In some cases, the SIPP operator may itself be liable for failing in its due diligence obligations. This is an active area of law following FCA guidance and Financial Ombudsman decisions.
If your loss is substantial, we recommend seeking advice on all available routes before accepting the FSCS payment as your only recourse. Contact us to discuss your situation.
FSCS vs Financial Ombudsman: Which Limit Is Higher?
The Financial Ombudsman Service (FOS) has a significantly higher limit than the FSCS. For complaints about events on or after 1 April 2019, the FOS limit is £415,000. However, the FOS only applies where the adviser firm is still trading and able to pay. The two schemes are not alternatives you can choose between freely — the applicable scheme depends on whether the firm has failed.
How to Make an FSCS Pension Claim
- Check the firm has failed: Confirm through the FCA register or the FSCS website that the adviser firm is no longer authorised or has entered default.
- Assess your loss: Work out the difference between what your pension is worth now and what it would have been worth had you not transferred — or what guaranteed benefits you gave up.
- Apply to the FSCS: You can apply directly at fscs.org.uk at no cost, or seek professional assistance if your case is complex.
- Consider other parties: Identify all the firms involved and whether any remain solvent. A solicitor can advise on whether parallel claims are available.