FSCS Starts Payments under Government LCF Compensation Scheme

The Financial Services Compensation Scheme (FSCS), the UK's statutory Deposit insurance and investors compensation scheme for customers of authorised financial services firms, announced that it has started to contact and offer compensation to bondholders who are eligible under the government's LCF compensation scheme.

In its latest update, the scheme said that it is sending out letters to around 1,000 bondholders. These letters will include details on what customers need to do to accept the offer, the payment terms and some calculation examples. It mentioned that all bondholders will receive their offer by 20 April 2022.

"If you receive compensation for any ISA investments you had with LCF, you can use this to make a single payment into another ISA without it counting towards your annual ISA subscription limit,"the scheme pointed out.

"If you are eligible for the government scheme and invested in ISA bonds with LCF, you will receive the standard compensation offer letter plus an additional letter from FSCS with the details you will need to show your ISA manager. These letters will arrive separately,"FSCS further added.

Last month, FSCS has provided an update to customers of AFX Markets​, saying that it has agreed on a process with the Joint Special Administrators (JSAs) to review customer claims and pay compensation on eligible claims.