What is the Financial Services Compensation Scheme (FSCS)?

The FSCS is the UK's compensation fund of last resort for customers of authorised financial services firms. This means that the FSCS can pay compensation to consumers if a financial services firm is unable, or likely to be unable, to pay claims against it. The FSCS is an independent body, set up under the Financial Services & Markets Act 2000. The FSCS does not charge individual consumers for using its service. For investment business, FSCS may pay compensation up to £50,000 per firm to an eligible claimant.

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Are Castle Trust investments covered by the FSCS?

Castle Trust Capital plc (the entity from which you buy Fortress Bonds) is an investment firm that is authorised and regulated by the FCA and is a participant in the FSCS.

The FSCS can pay compensation if a number of conditions, set out in FCA rules, are met. The FSCS considers each claim individually at the time a claim is made to decide whether the conditions are met. The main conditions are:

  • An authorised firm must be “in default” – i.e. it is unable or likely to be unable to pay claims against it;
  • The claim must relate to a regulated activity that is protected by the FSCS, such as protected investment business;
  • The firm must be legally responsible for the claimant’s loss; and
  • The claimant must be eligible.

Castle Trust’s legal obligation to buy back Fortress Bonds and Housas* is “protected investment business”.

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How do you know if you are eligible for FSCS compensation and have a valid claim?

The eligibility of claimants is determined on a case by case basis. Claimants are eligible to claim unless they are excluded by the rules set out in the FCA Handbook.

Private individuals, small companies, beneficiaries of trusts and SIPP investors are generally eligible to claim compensation where they are not connected to the relevant FCA regulated firm (Castle Trust Capital plc). Large companies and overseas financial service firms are excluded. As well as being an eligible claimant, you need to have a valid claim within the rules of the FSCS.

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What is the maximum cover of the FSCS on Castle Trust investments?

If you are eligible for FSCS protection, the FSCS may pay compensation on your investment, up to a maximum of £50,000 per person. If you invest as a joint account and both individuals are eligible under the FSCS, you can claim up to a maximum of £100,000. A higher limit of £85,000 applies in relation to firms offering deposits such as banks and building societies, but Fortress Bonds and Housas* are not deposits.

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How do you confirm that Castle Trust is authorised by the FCA?

You can find Castle Trust Capital plc (firm reference number 541910) in the FCA register.

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If you hold multiple investments with Castle Trust, are you covered up to £50,000 per investment?

No, if you are eligible for FSCS compensation, the FSCS can pay up to a maximum of £50,000 per individual in respect of claims against Castle Trust.

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Does the FSCS cover your initial investment and any interest you have earned?

The FSCS can compensate you for losses arising from the insolvency of an FCA regulated firm, up to a maximum of £50,000. You must be an eligible claimant with a valid claim under the FSCS.

Please note that:

  1. if you invested in a Growth Housa and if the value of your investment falls during the investment term, the FSCS will not compensate you for any loss arising from this market movement;
  2. if you invest in a Fortress Bond that pays interest quarterly, the FSCS will not compensate you for any unpaid interest as this is not an obligation of the FCA regulated firm (Castle Trust Capital plc);
  3. if you invest in a Fortress Bond that pays interest at maturity, the FSCS may compensate you for accrued but unpaid interest in so far as this is an obligation of the FCA regulated firm (Castle Trust Capital plc).
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How does the FSCS pay compensation to you?

You will not have compensation paid out to you automatically. You will have to apply for compensation. Please go to the FSCS website for more details: www.fscs.org.uk.

The above information is provided for informational purposes only and does not represent investment advice, endorsement or recommendation to invest in any financial product or security. Customers are advised to consult a financial adviser in the event of any doubt regarding the suitability of any financial product.

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* Please note that Housas are no longer available for purchase. Existing Housas remain unaffected.

Investments
You risk losing capital should Castle Trust become insolvent.

Castle Trust is the trading name of Castle Trust Capital plc, company number 07454474 and Castle Trust Capital Management Limited, company number 07504954. Each firm is authorised and regulated by the Financial Conduct Authority. Registered office: 10 Norwich Street, London, EC4A 1BD. Registered in England and Wales.

This website is for authorised intermediaries only. This information has not been approved for use with customers and is not intended for public or customer use. Please confirm that you are an intermediary before accessing information on this website.

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