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I’m considering buying an annuity with my pension pot of £64,000. Will I still get payments if my annuity provider goes bust?
Christopher from Essex
Joanne Padilla, Which? Money expert, says...
Yes, annuities provided by UK-regulated insurers are protected by the Financial Services Compensation Scheme (FSCS) up to 100% of their value, with no upper limit.
That's in contrast to bank accounts, where you're protected up to £85,000 per person per bank.
You can double-check that your annuity provider is authorised by the Prudential Regulation Authority (the UK regulator for these products) by looking it up on the Financial Conduct Authority Register (register.fca.org.uk).
Not all pension products are protected in the same way.
For example, self- invested personal pensions (Sipps) are classed as ‘uninsured’ pension schemes (as opposed to ‘contracts of long-term insurance’). If your Sipp provider goes bust, up to £85,000 will be protected.
Not all pension products are protected in the same way
The providers of Sipps have their investors’ funds held separately, so the money is safe if they were to go out of business.
The FSCS has a tool on its website that allows you to see what protection applies to your pension.
It says that most claimants with pension-related cases get decisions within 14 months.
Speak to HUB Financial Solutions to help you compare the options available across the whole market.
Find out moreIf you take out an annuity as a result of using the service from HUB Financial Solutions, Which? will earn a commission to help fund its not-for-profit mission.
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