UK investments overseas – worried about your security?

Man looking worried while looking at his UK investments overseas on his laptop computer

Investing

MoneyPlus Features Team

7th October 2015 at 4:06pm

Since the financial crisis in 2008, there have been some consumer concerns over how well their pensions, investments and savings are protected should something happen to their financial institution.

As it can be particularly difficult where someone is living abroad and may have to consider different regulatory protections, we thought having a look at how the UK protections work in this scenario might help to settle some nerves.

The levels of protection

There are a number of points to take into account when looking at this –

  1. Where you were resident at the time of taking your investment out

  2. The provider you used

  3. The type of contract

  4. Where you are resident now

The main UK protection scheme is called the Financial Services Compensation Scheme or FSCS for short. It protects consumers within the European Union (EU) who take out a product with a company authorised by the Prudential Regulation Authority (PRA). The FSCS is funded by a levy paid by all PRA regulated companies.

The level of protection available depends on the type of product you hold.

The most common types are –

PRODUCT

LEVEL OF PROTECTION

Pension 100% coverage without limit
Bond 100% coverage without limit
Bank account Capped at £85,000 (going down to £75,000 from January 2016)
Unit Trust Capped at £50,000

How you are covered

In a majority of cases you will have been in the UK when you took the product out, so provided it was with a PRA regulated company, you’ll be covered by the FSCS no matter where you go in the world.

However, some PRA regulated companies now offer products into other jurisdictions, so it could be the case you may not have been in the UK when you first took it out. In this event, the protection that applies will depend on where you were at that time. If within the European Economic Areas (EEA), then you are protected. If outwith the EEA, then it will come down to whatever local protection scheme is in place, if any.

For more information

We know this is a complex area, so if this is a concern for you, you can check out the FSCS website, ask your UK financial adviser or speak to your provider. And Standard Life customers can get more information here.

Join the conversation

Join the conversation on our MoneyPlus Community or follow us on twitter @sl_moneyplus and Facebook and let us know any of your thoughts an questions after viewing this article.  We’d be particularly interested in hearing from any of you who hold UK investment whilst living abroad. Use any of the mediums above or leave a comment below and we’ll get back to you.

This information is based on our understanding of legislation and regulations in October 2015. The legislation and regulations can change.