What is the FSCS?

What level of protection does the FSCS offer for pensions?

Generally, the FSCS can protect pensions that are provided by UK-regulated insurers, as long as they qualify as ‘contracts of long-term insurance’. 

A common example is an annuity, where you exchange the cash in your pension for a regular income from an insurance company. 

This also applies to most defined contribution pensions, such as personal and private pensions. That includes PensionBee pensions - more on this below.

Where the FSCS can pay compensation, it’ll cover the pension at 100% with no upper cap.

There are different levels of compensation for other types of pension products.

For example, that could be where an investment was held within a personal pension (e.g. a Self-Invested Personal Pension), and the UK-regulated provider of the investment fails. In this case, the FSCS may be able to pay compensation up to £85,000 per pension scheme member.

Likewise, if a UK-regulated adviser has given bad advice concerning a pension (e.g. to transfer it), the FSCS may be able to pay compensation up to £85,000 per person, per product. If the adviser is still trading, you can complain to the Financial Ombudsman Service (FOS).

The FSCS doesn’t protect defined benefit pensions if they fail. These may be protected by the Pension Protection Fund (PPF).

Check the FSCS website for more information about what and how much of your savings could be covered.

PensionBee and the FSCS

PensionBee’s a proud member of the FSCS. 

Your PensionBee pension’s structured as a long-term insurance contract. The money in it is managed by some of the world’s largest money managers, such as BlackRock and State Street.

If something happens to the money managers and the FSCS accepts the claim, they would cover up to 100% of your pension, with no upper cap.

Because PensionBee has arranged the contracts with the money managers, we’ll pursue the compensation on your behalf.

Please note that the FSCS assesses every claim against failed companies at the time of the claim. The rules and interpretation surrounding FSCS protection are subject to change.

While your money’s with another pension provider

The protection available to you with another pension provider depends on how their pension product’s structured. 

Ask the provider directly about FSCS protection. There may be some protection available or none at all.

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While your money’s in transit between PensionBee and your old pension provider

Your money will have the available protections each pension provider has arranged for while it’s in transit between us and an old provider.

It’s likely that, before transferring your pension to PensionBee, your old provider will move your savings to a clearing bank account. From there, they’ll send it to the PensionBee Trustees Limited clearing bank account.

PensionBee operates a clearing bank account solely for receiving your transfers or contributions and sending them to the relevant money manager. It’s unlikely that your savings will be held in this clearing account for more than a few working days. It may happen if we haven’t received enough information to identify the payment.

The clearing bank account’s held with Barclays Bank and is separate from all other PensionBee assets and bank accounts. That means it’ll be unaffected should anything happen to PensionBee. 

The FSCS is generally able to cover deposits held in pooled client accounts so long as you’re ‘absolutely entitled’ to these funds. This is a legal test and depends on the terms and conditions of the arrangement in each case. 

The FSCS can’t compensate you for more than £120,000 in total per bank. That covers all your claims against the bank (including if you have personal deposits with the bank). Note that some banks operate under the same banking licence. You're only covered for up to £120,000 across multiple institutions if they use the same licence.

It may take the FSCS up to three months after a bank failure to pay compensation for deposits held in such accounts.

If PensionBee makes a mistake with your pension

If PensionBee makes a mistake while administering your pension, you can complain directly to us using our Complaints Policy. 

If you’re dissatisfied with our response to your complaint, you may refer your complaint to the FOS.

If the FOS rules in favour of your complaint and PensionBee Limited has become insolvent, you may be able to receive compensation from the FSCS up to £85,000.

How does PensionBee’s FSCS protection compare to that of other personal pensions or SIPPs?

Many PensionBee customers have transferred their workplace pensions (often structured as long-term insurance contracts) to us. As a result, we consider it important to offer the same type of underlying long-term insurance contracts that benefit from up to 100% protection.

PensionBee offers the same type of institutional pension funds commonly found in the workplace. These differ to the typical retail funds found with fund supermarkets. 

It’s highly unusual for another personal pension provider or SIPP provider in the market to offer investments structured as contracts of long-term insurance that benefit from this level of protection.

This means that, when someone leaves a workplace scheme structured as a contract of long-term insurance to join PensionBee, they have the same type of FSCS protection with their savings.

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Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 22-09-2026