On 31 October 2022, the UK Financial Services Compensation Scheme (FSCS) will be closing the LCF compensation scheme that FSCS has been administering on behalf of the government.

Since the scheme began, FSCS has been able to successfully pay 99.5% of customers eligible for compensation, helping customers and their families get back on track. In total, £115 million has been paid out in compensation.

There are a small number of claims that FSCS has still not been able to pay where it has requested information multiple times but had no reply or where the bondholder has passed away and FSCS has not been able to locate their next of kin.

FSCS says it may be able to pay these claims in exceptional circumstances after 31 October 2022. However, as the government scheme is closing, it may take FSCS longer to process these claims and pay compensation. You can find more information here.

If you have recently received a cheque, you will still be able to cash it after 31 October 2022, as long as it is cashed within six months of the issue date.

The Government scheme was announced on 19 April 2021. It is a one-off compensation scheme which aims to provide compensation to eligible bondholders who FSCS couldn’t compensate.