FSCS Protection

The Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS) exists to protect customers of UK financial services firms that have failed. If a company you’ve been dealing with has failed and can’t pay claims against it, the FSCS can step in to pay compensation.
For more information on FSCS cover, please see the please see the FSCS website.

 

How your investments are protected

Moneybox, and the partner firms we work with in relation to your investments, segregate client assets from their own assets. This means that a high level of protection is available in the unlikely event of firm insolvency.

However, if Moneybox failed, because we are covered by the FSCS in relation to investment products, you would be eligible to claim up to £85,000 if there was any shortfall in the assets we held for you, or if you had another claim against us relating to your investments.

For investments in mutual funds and exchange traded funds, we appoint our UK Broker, Winterflood Securities, to hold your investments as a custodian. If Winterflood Securities failed and it resulted in a loss of your investments, then you would be covered up to £85,000 under the FSCS in respect of our broker’s activities, which we would claim on your behalf. Our fund providers are also covered by the FSCS up to £85,000, except for the funds which are domiciled outside of the UK. However, these investments are held within the fund, so a high level of protection is in place in the unlikely event that a fund provider becomes insolvent. All exchange traded funds, the Old Mutual MSCI World ESG index and HSBC Islamic Global Equity Index Fund are domiciled outside of the UK.

The BlackRock Lifepath fund available via the Moneybox Pension, is a protected contract of insurance for the purposes of the FSCS. FSCS cover is 100% of the claim without limit on the default of the insurer. In the event that BlackRock Life Limited fails, FSCS protection applies to 100% of the amount invested in the Blackrock Lifepath fund.

Please note that the FSCS £85,000 limit applies per individual, in relation to each failed financial services firm. Only one claim can be made per loss. Also note that a claim would not be eligible if the shortfall or loss was a result of general investing risk. The FSCS will not accept any claims for investment underperformance.

For investments in US stocks, we appoint our US broker, DriveWealth, to hold your investments as a custodian. As a US firm, DriveWealth is not covered by the FSCS. However, as with Moneybox and its UK broker, these investments are segregated and held in a designated account at DriveWealth.

 

How your money is protected

Moneybox is authorised by the Financial Conduct Authority (FCA) to hold client money but we’re not a bank. This means that in different scenarios your money is protected in different ways. As with investments, we segregate client money from our own money.

For all of our savings products and available cash held in our investing products, Moneybox deposits your money with third party banks. These banks are covered by the FSCS and, in the event one of them fails, you would be eligible to claim up to £85,000 per person per bank for any shortfall in money. Moneybox would make the claim to the FSCS on your behalf in relation to savings products and the claim may take up to three months to settle. Please note the £85,000 limit applies in aggregate to the total amount of money held by you at any one bank, whether it is deposited by Moneybox, by other providers, or by you directly with the bank.

Below we detail where your funds will be held depending on the product you choose.

 

Cash Lifetime ISAs

Moneybox uses a broad range of banks for its Cash Lifetime ISA. The proportion of money held with each bank can vary over time. However, we will never hold more than 50% of the total funds with a single bank at any given moment.
The banks we use change over time. The banks we currently use are:

 

Moneybox Cash ISA

Moneybox uses a range of banks for its Cash ISA. The proportion of money held with each bank can vary over time. However, we will never hold more than 50% of the total funds with a single bank at any given moment.

The banks we use change over time. The banks we currently use are:

 

Savings Accounts

1. 95 Day Notice Account

This money is held with Investec Bank Plc.

 

2. 45 Day Notice Account 

This money is held with Charter Savings Bank (the trading name for Charter Court Financial Services Limited).

 

3. 120 Day Notice Account 

This money is held with Charter Savings Bank (the trading name for Charter Bank Financial Services Limited).

 

4. 32 Day Notice Account

This money is held with Investec Bank Plc.

 

5. Reward Savings Account (easy access)

This money is held with Cynergy Bank Limited.

 

6. Simple Saver Account (easy access)

This money is held with Santander International (the trading name for Santander Financial Services Plc).

 

Investment Accounts

General Investment Account, Stocks and Shares Lifetime ISA, Stocks and Shares ISA & Junior ISA

Cash holdings in an investment account (General Investment Account, Stocks and Shares Lifetime ISA, Stocks and Shares ISA & Junior ISA), are held as client money. The banks we use change over time. The banks we currently use are;

Cash held for the purpose of buys or sells of investments, or the receipt of dividends, may be held in client transaction accounts with our US or UK Brokers for up to one business day. Funds with our brokers may not qualify for FSCS, therefore we ensure that funds do not sit in transaction accounts longer than necessary for the actioning of a transaction. However, this money is segregated and held in a designated transaction account, offering a level of protection should the brokers go into default.

 

Money in transit

We use HSBC Bank Plc as our operational bank. This means that money on its way into or out of your product will be held in segregated client accounts with HSBC Bank Plc. For more detail on the flow of your funds, please refer to our terms & conditions.

If you add money via instant bank transfer, your funds will be held with Starling Bank Limited for one business day prior to transferring into HSBC Bank Plc.

If you contribute money to your Moneybox account via Direct Debit, these funds are paid to Moneybox via GoCardless Ltd, an authorised payment institution. Typically, GoCardless will collect these funds from your personal bank account on a Monday (unless it’s a bank holiday week) and pay these funds to a client money bank account with us the next business day. Whilst your money is with GoCardless, it is not covered by FSCS, but it is protected through the FCA’s safeguarding rules.