Is My Money Safe in an Investing App? FSCS and Investment Risk
Is your money safe in a UK investing app? How FSCS protection, client-money rules and investment risk actually work, in plain English.
If you are about to move real money into a phone app, it is fair to ask whether your money is safe in an investing app before you tap “confirm”. The honest answer has two halves that people constantly mix up: the app going bust is one risk, and your investments falling in value is a completely separate one. UK rules protect you well against the first and not at all against the second. Getting that difference clear is the single most useful thing you can do before you invest.
The two risks, kept separate
Platform risk is the danger that the company behind the app fails, is run badly, or loses track of your money. This is the risk that regulation and the Financial Services Compensation Scheme (FSCS) are built to handle.
Investment risk is the danger that the shares, funds or bonds you bought go down. No scheme, app or government covers this. If you put £1,000 into a global fund and it drops to £850, that is a normal market movement, and nobody reimburses it. The Financial Conduct Authority is blunt about it: “you could lose all the money you invest”.
Most “is my money safe” worry is really about platform risk, so start there.
What FSCS actually protects
The FSCS is the UK’s statutory safety net. For investments, it can pay up to £85,000 per eligible person, per firm if an authorised firm fails and there is a shortfall in the money or assets it was holding for you. That limit applies where the firm failed on or after 1 April 2019.
The key word is shortfall. FSCS steps in when a failed firm cannot return the cash or investments it should have been keeping for you, for example because of fraud or sloppy record-keeping. It explicitly does not cover poor investment performance. In the scheme’s own words, it “can’t accept any claims that are for poor investment performance”. A fund losing value is never an FSCS claim. You can read the full detail on the FSCS investment protection page.
Two conditions matter for cover:
- The firm must be authorised by the FCA or PRA. You can check any firm on the FCA’s Financial Services Register before you sign up.
- The £85,000 limit is per firm, not per app. If two apps you use both route to the same underlying broker or custodian, you may share one limit across them.
Why your money is usually kept out of harm’s way anyway
FSCS is the backstop, but the first line of defence is the client-money rules that every FCA-authorised investment firm must follow. Firms are required to keep client money and client assets separate from their own business funds, typically in ring-fenced accounts and with your shares held by a custodian in a nominee account. If the firm goes under, that money is not part of its estate and should be returned to clients rather than used to pay the firm’s creditors. FSCS only has to fill the gap if something has gone wrong with that segregation.
This is why a regulated app failing is rarely a “your money vanishes” event. In most orderly failures, an administrator returns client assets, and FSCS covers any shortfall up to £85,000.
Cash on an investing app is a special case
Some apps let you hold uninvested cash, and how that cash is protected varies:
- If the app holds your cash under client-money rules, it sits with the £85,000 investment protection described above.
- If the cash is swept into or held by a partner bank (some apps do this to pay interest), it may instead be covered by the £85,000 deposit protection at that bank. If you already hold savings at that same bank, the limit is shared.
Check the app’s terms for exactly where uninvested cash sits. It changes which £85,000 limit applies and whether it overlaps with your other accounts.
What is not covered, ever
- Market losses. Falls in the value of shares, funds, crypto or bonds. This is the risk you are paid to take.
- Unregulated products. Some apps offer crypto or other investments that fall outside FCA regulation and therefore outside FSCS. If an app mixes regulated and unregulated products, only the regulated part is protected.
- Your own mistakes. Buying the wrong thing, panic-selling, or falling for a scam that you authorised.
- Overseas firms that are not authorised in the UK. An app registered abroad may sit under a different, weaker scheme or none at all.
How to check an app before you trust it
- Find the firm on the FCA Register. Note the exact legal name, which is often different from the app’s brand name.
- Read the “how we protect your money” page. A trustworthy app states plainly that it is FCA-authorised, that client money is segregated, and that FSCS cover applies.
- Find out who the custodian is. Knowing which entity actually holds your assets tells you where the £85,000 limit really sits.
- Check for unregulated products. If crypto is on offer, treat that balance as unprotected.
- Lock the app down. Turn on biometric login and two-factor authentication. FSCS does not cover money lost because someone got into your account.
For more on how the popular UK apps compare on safety and features, see our guides to the best investment apps for beginners in the UK and how to start investing with an app from £1 a month. If you are weighing up cash instead, are digital banks safe? covers deposit protection in more detail.
Frequently asked questions
Is money in an investing app safe if the company goes bust? Usually yes, up to a point. Your cash and investments should be held separately from the firm’s own money, so an administrator can return them. If there is a shortfall, FSCS covers up to £85,000 per person, per firm, for authorised UK firms.
Does FSCS protect me if my investments lose value? No. FSCS never covers falls in market value. It only covers losses caused by an authorised firm failing with a shortfall in the money or assets it held for you, or by poor regulated advice. Normal ups and downs are your risk.
How much is protected in a UK investing app? Up to £85,000 per eligible person, per firm, for firms that failed on or after 1 April 2019. The limit is per firm, so using two apps that share the same underlying broker may mean sharing one limit.
Is uninvested cash in the app also protected? It depends where the app keeps it. Cash held under client-money rules sits under the £85,000 investment limit. Cash swept to a partner bank may instead sit under that bank’s £85,000 deposit limit, shared with any savings you already hold there.
How do I know if an investing app is regulated? Search the firm’s legal name on the FCA’s Financial Services Register. If it is authorised, the register shows its permissions. If you cannot find it, do not invest.
Are crypto balances in a money app FSCS protected? Generally no. Most crypto sits outside FCA regulation, so it falls outside FSCS. Treat any crypto balance as unprotected even if the same app’s share dealing is covered.
