Protection for you 

We're part of the Financial Services Compensation Scheme (FSCS). The scheme is set-up to protect you.

If we get into financial difficulties which may affect our ability to pay your claim, you may be eligible to receive compensation under the FSCS.

  • The FSCS is an independent body set up by the UK Government to provide compensation or some other form of resolution for people where their authorised financial services provider gets into financial difficulties and becomes unable, or unlikely to be able, to pay any claims. This circumstance is widely referred to as being 'in default'.
  • It is important for you to be aware that you may not always be able to make a claim under the FSCS, and there are also limitations in the amount of compensation you may receive.
  • Any compensation available will depend on your eligibility, the type of financial product or service involved, the investment funds selected (if applicable) and the circumstances of the claim.
  • Losses, which may result from poor investment performance, are not covered by the FSCS.

Are the products Prudential offer covered by the Financial Services Compensation Scheme (FSCS)?

Yes. The products offered by the Prudential Assurance Company Limited (PACL) and other UK authorised and regulated firms in M&G plc are subject to the FSCS. You may be able to make a claim if Prudential is unable to meet its financial obligations.

It’s important to know though that the scope and amount of cover does depend on the type of policy involved, and also the funds selected. You’ll find more information below in the section titled “Are there limits to the compensation payable by the FSCS?”.

Is Prudential International Assurance plc (PIA) covered by the Financial Services Compensation Scheme?

Prudential International Investment Bond, Prudential International Investment Portfolio, Prudential International Prudence Bond and the International Portfolio Bond.

For eligible policyholders habitually resident in the UK, FSCS will apply for policies taken out anytime from 1 December 2001 up until close of business on the 31 December 2020. For any policy issued during this period, additional investments (top-ups) made pre or post 31 December 2020 will also be covered by the FSCS.

Policyholders of a UK policy issued before 2001, may be eligible to make a claim, but since such a policy was taken out before the FSCS regime commenced, they should check their eligibility directly with FSCS.

Any policies issued after 31 December 2020, are not covered by a government-backed financial guarantee scheme, including FSCS in the UK.

Prudential Onshore Portfolio Bond.

For eligible policyholders habitually resident in the UK, FSCS will apply for policies taken out on or after 1 December 2001.

Are there limits to the compensation payable by the FSCS?

Yes. The FSCS operates different levels of compensation. The scope and amount of cover available depends on the type of policy involved and the funds selected.

Where does FSCS protection apply?

There is full FSCS coverage if PACL is ‘in default’.

  • Your bond or pension is protected up to 100% of the value of your claim.
  • Any funds you choose to hold in your bond or pension will be included in the value of your claim in the event that PACL is declared ‘in default’.
  • If you hold the Prudential With-Profits funds or PruFund funds (where they’re options available to you) in your bond or pension, they are protected 100% in the event of the default of PACL.

All the other funds we offer, apart from those mentioned above, are unit-linked, and invest in other funds managed by  non-PACL fund managers.  FSCS cover does not apply if the non-PACL fund manager were to be ‘in default’.

  • There is no FSCS cover for unit-linked funds investing with non-PACL fund managers if that manager were to be ‘in default’.

Where does FSCS protection apply?

There is FSCS coverage if PACL is ‘in default’. 

  • PACL is the operator of the Prudential Retirement Account, so if PACL defaults as operator of the  personal pension plan you are protected up to £85,000. 
  • If you hold the Prudential PruFund  funds in  the Prudential Retirement Account, then they’re protected up to 100% in the event of PACL being ‘in default’

Any further FSCS cover depends on where you invest.

  • A collective fund (often called an Open Ended Investment Company or OEIC) -  These funds are protected up to £85,000 per person per firm ‘in default’.
  • Stocks & shares investments (Stocktrade) - Fully protected up to £85,000 per person, per firm ‘in default’.
  • Cash Account (HSBC) - Fully protected up to £85,000 per person, per deposit group.

Where does FSCS protection apply?

There is full FSCS coverage if PACL is ‘in default’. 

  • Your product is protected up to 100% of the value of your claim.
  • Any investments you choose to hold in your product will be included in the value of your claim in the event that PACL is declared ‘in default’.
  • If you hold the Prudential With-Profits fund or PruFund funds in your product, they are all protected 100% in the event of the default of PACL.

Other investment options are not protected by the FSCS.

  • All the other Prudential funds we offer (you’ll know these if the name starts ‘Prudential’), apart from those mentioned above, are unit-linked and invest with non-PACL fund managers, so FSCS cover does not apply if that fund manager were to be ‘in default’.
  • And the FRP Holding Account, and any investment in the Self-Invested Fund, (see your Key Features Document for more information) are also not protected.

Where does FSCS protection apply?

There is FSCS coverage if PACL is ‘in default’. 

  • If you hold the Prudential PruFund  funds, then they’re protected 100% in the event of PACL being ‘in default’.

The ISA Terms and Conditions explain the cover applicable for other funds available through the Prudential ISA.

Where does FSCS protection apply?

Prudential International Investment Bond, Prudential International Investment Portfolio, Prudential International Prudence Bond and the International Portfolio Bond.

If PIA was deemed to be ‘in default’, FSCS cover will apply for eligible policyholders habitually resident in the UK for policies taken out between 1 December 2001 and before the close of business on 31 December 2020. Policyholders holding a UK policy issued before 2001 may be eligible to make a claim, but since such a policy was taken out before FSCS commenced, they should check their eligibility directly with FSCS.

By investing in a PIA contract, PIA invests your money in funds that are provided by third party fund managers (i.e., non-M&G plc fund managers and fund managers within M&G plc, including The Prudential Assurance Company Limited). In such circumstances, you will not be protected by FSCS should these funds or the related fund management companies be deemed to be in default.

However, if PIA is in default, the value of any investment held in these funds will still form part of a claim under FSCS for an eligible policyholder habitually resident in the UK for policies issued between 1 December 2001 and before the close of business on 31 December 2020.

Prudential Onshore Portfolio Bond

For eligible policyholders habitually resident in the UK, FSCS will apply for policies taken out on or after 1 December 2001.

Where does FSCS protection apply?

There is full FSCS coverage if PACL is ‘in default’.

  • Your pension is protected up to 100% of the value of your claim.
  • Any funds you choose to hold in your pension will be included in the value of your claim in the event that PACL is declared ‘in default’.
  • If you hold the Prudential With-Profits fund or Deposit fund (where they’re options available to you) in your pension, they are protected 100% in the event of the default of PACL.

All the other funds we offer, apart from those mentioned above, are unit-linked, and invest in other funds managed by  non-PACL fund managers.  FSCS cover does not apply if the non-PACL fund manager were to be ‘in default’.

  • There is no FSCS cover for unit-linked funds investing with non-PACL fund managers if that manager were to be ‘in default’.

Annuities

  • 100% of the claim with no upper limit for the claim amount.

Investments (e.g. Unit Trusts, Open Ended Investment Companies and Stocks & Shares ISAs)

  • 100% but limited to £85,000 per person, per firm in default.

Investment & Home finance advice (e.g. investment planning and mortgage advice).

  • 100% but limited to £85,000 per person, per firm in default.

General insurance policies

  • 90% of a claim with no upper limit.
  • Compulsory insurance, such as car insurance, for policies started on or after 14 January 2005, is fully covered with no upper limit.

Deposits

The FSCS would pay compensation up to the limit of £85,000 per person, per authorised deposit Group (bank, building society and credit unions). Since 3 July 2015, the FSCS provides a £1 million protection limit for temporary high balances held with your bank, building society or credit union if it fails.

Where FSCS coverage does not apply, then other factors can come in

FSCS doesn’t cover every situation. For example unit-linked funds that invest in the funds of non-PACL/PIA fund managers (often called ‘mirror’ funds).

But, where FSCS protection does not apply, there are other factors that could help if the worst happened and a provider was ‘in default’. For example, the use of custodians or depositories to provide protection for fund assets, where there is separate legal ownership of assets and legal entities that aren’t liable for any losses of a fund manager. In so doing, the intention is that the underlying fund will not be liable for any losses the underlying fund management company incurs.

PACL/PIA would aim to recover any money invested in an underlying fund where the fund manager has been declared ‘in default’, but PACL/PIA would not be liable for any loss incurred from the default of the non-PACL/PIA fund manager.

More information about the FSCS

The Financial Services Compensation Scheme
PO Box 300
Mitcheldean
GL17 1DY

Or call the FSCS: Telephone: 0800 678 1100

Website: www.fscs.org.uk

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