Be in the know: the Financial Services Compensation Scheme (FSCS) and Financial Conduct Authority (FCA)
What is the FSCS?
The FSCS protects you from losing some of your money if an authorised financial services company goes bust. The FSCS offers protection up to £85,000 of savings per individual per financial institution. It also covers mortgages, insurances and investments. In some circumstances, you could be covered for more than £85,000.
What is the FCA?
The FCA monitors which companies and individuals can enter the financial markets. When firms meet FCA standards and received authorisation they are monitored to ensure compliance with FCA standards, those that don’t meet standards are regulated. If firms are not following rules the FCA will intervene, which may involve them imposing penalties, or prohibiting from trading.
The FCA reports to the government and can pursue criminal action against companies that violate its standards and codes of conduct. The FCA also ensure companies are informing customers of the necessary information for them to make informed decisions on products and services.
What’s the AER ?
AER is the Annual Equivalent Rate and indicates what the interest rate would be if interest is paid compounded once a year.
