How the Financial Services Compensation Scheme protection works

At Freetrade, your money is protected by the Financial Services Compensation Scheme (FSCS). It’s one of several ways in which Freetrade keeps customers safe.

But what does this mean in practice? 

What is FSCS protection?

FSCS protection means you can be compensated if you suffer losses because your bank or financial services provider goes bust. 

When a relevant financial institution enters insolvency, the FSCS will publish updates on its website to inform customers of any action they need to take. In some cases, the FSCS will return money to you automatically, but you may need to make a claim using their online claims service.

Freetrade accounts are covered by the FSCS.

This means you can have confidence that the cash and assets in your Freetrade stocks and shares ISA, Self Invested Personal Pension (SIPP) and General Investment Account (GIA) accounts is protected. 

What is the FSCS protection limit?

As of December 2025, the upper limit of compensation offered under FSCS in the event of a bank, building society or credit union’s collapse was raised from £85,000 to £120,000. 

The protection is per person and per authorised financial institution. 

Are investments protected by FSCS?

Your investments are protected by the FSCS, but it is important to understand how this protection works. FSCS protection is designed to compensate customers impacted by the failure of providers.

This means that if you invest through a platform which is FSCS protected (like Freetrade) and the platform goes bust, losses incurred by you due to this failure may be covered.

In addition to FSCS protection, Freetrade's regulator (the FCA) set out rules informing how your money and investments must be held. These rules are designed to protect your investments in the event that a platform goes bust.

It’s important to be clear that the FSCS does NOT cover losses if the value of an investment falls.

For example, if you own shares in a company and the company goes bust, you are not entitled to compensation. 

In short:

• Your provider goes bust? FSCS protected.
• Your investment loses value? Not FSCS protected.

Remember that the value of your investments can go down as well as up, and this is one of the intrinsic risks of investing. 

What other ways are Freetrade customers protected?

If you are looking for other information about how Freetrade customers are protected, explore guides on client money protection and what happens if Freetrade goes bust.

FSCS protection - FAQs

Are crypto assets protected by FSCS?

Crypto assets, such as crypto ETNs, are not covered by the FSCS.

How can I check for FSCS protection?

You can check whether a provider is covered by the FSCS by searching for them on the Financial Services Register on the Financial Conduct Authority website. 

Are Freetrade accounts FSCS protected?

Yes, Freetrade accounts carry FSCS protection.

Are SIPPs FSCS protected?

Yes, SIPPs from relevant providers, such as Freetrade, are covered by the FSCS. 

Are stocks and shares ISAs FSCS protected?

Yes, stocks and shares ISAs can receive FSCS protection. Just remember that protection applies when your provider fails, not when your investments fail. 

Are temporary high balances covered?

Temporary high balances are covered up to £1.4m and are protected for up to six months. To be eligible, the higher than usual balance must be due to a specific life event, such as a house sale, redundancy or divorce. You will need to provide evidence to prove the source of the money.