Finance Editor, Kael Tripton Ltd - LBS MBA - Verified against FCA Handbook: 14 June 2026
Quick answer
FOS (Financial Ombudsman Service) is for disputes with firms that are still trading. FSCS (Financial Services Compensation Scheme) is for claims against firms that have become insolvent. You cannot use both for the same issue. FOS awards up to 430,000 pounds. FSCS pays 90% of any home insurance claim with no upper limit.
FOS vs FSCS: The Core Difference
Direct answer
When do I use the FOS and when do I use the FSCS?
Use the FOS (financial-ombudsman.org.uk) when your insurer or bank is still trading but handled your complaint incorrectly. Use the FSCS (fscs.org.uk) when your firm has become insolvent and cannot pay claims. Check the FCA Register to confirm the firm's current status.
| Feature | Financial Ombudsman (FOS) | FSCS |
|---|---|---|
| When to use | Firm is still trading but wrong | Firm has become insolvent |
| Maximum award | 430,000 pounds | 90% of claim -- no upper limit for home insurance |
| Cost to consumer | Free | Free |
| Time limit | 6 months from Final Response Letter | No strict time limit -- contact FSCS when firm fails |
| Binding on firm? | Yes, if consumer accepts | Yes -- statutory scheme |
| Distress compensation? | Yes -- typically 100-500 pounds | No -- claim amount only |
| Where to start | financial-ombudsman.org.uk | fscs.org.uk / 0800 678 1100 |
Identify whether the firm is still trading
Check the FCA Register at register.fca.org.uk. 'Authorised' = FOS route. 'In Administration' or 'Cancelled' = FSCS route.
For FOS: exhaust internal complaints first
Write to the firm, wait 8 weeks for Final Response, then refer to FOS within 6 months of the Final Response date.
For FSCS: register your claim
Go to fscs.org.uk or call 0800 678 1100. The FSCS contacts policyholders but proactive registration ensures you are on the list.
Keep all documentation
Policy schedule, claim correspondence, Final Response Letter and any FSCS or FOS reference numbers. These are required for both processes.
Do not assume you cannot claim if the firm failed
The FSCS covers 90% of home insurance claims with no upper limit -- check eligibility even if you assume the firm failure means you cannot recover anything.
Related KT guides
Frequently Asked Questions
What is the difference between FOS and FSCS?
The Financial Ombudsman Service (FOS) resolves disputes between consumers and solvent FCA-authorised firms that have handled complaints incorrectly. The Financial Services Compensation Scheme (FSCS) compensates consumers when an FCA-authorised firm becomes insolvent and cannot meet its obligations. FOS is for ongoing firms that make wrong decisions. FSCS is for failed firms that cannot pay at all. You cannot use both for the same issue -- if the firm has failed, FSCS applies; if the firm is still trading but handled your complaint wrong, use FOS.
Can I use both FOS and FSCS?
Not for the same issue. If your home insurer is still trading but declined your claim unfairly, use the FOS. If your home insurer became insolvent and cannot pay any claims, use the FSCS. In very rare cases where a firm enters administration after a complaint is already with the FOS, the FOS will typically stay the complaint and refer the matter to the FSCS for the underlying claim while continuing to assess the firm's conduct separately.
Which pays more -- FOS or FSCS?
For home insurance claims specifically, the FOS can award up to 430,000 pounds with no lower limit and can also award distress and inconvenience compensation. The FSCS pays 90% of the valid claim amount with no upper limit. So for a large claim (e.g. 500,000 pound property rebuild), FSCS pays 450,000 pounds (90%) while the FOS is capped at 430,000 pounds. For smaller claims with distress and inconvenience, the FOS may award more in total including compensation.
How long does the FSCS take to pay a claim?
The FSCS aims to process straightforward claims within 6 months of being appointed to manage a failed firm's compensation. Complex claims involving disputed amounts or multiple claimants may take longer. The FSCS contacts policyholders directly when it is activated for an insurer failure -- you do not need to wait for them to contact you; you can proactively register a claim at fscs.org.uk.
What happens to my open home insurance claim if my insurer goes into administration?
If your home insurer goes into administration with an open claim outstanding, the FSCS is activated for insurance claims. Your claim is assessed by the FSCS or by specialist administrators appointed to manage the failed insurer's claims book. The FSCS pays 90% of the validated claim amount. You remain a creditor of the insurer for the remaining 10% but recovery is unlikely in most administrations.
Primary sources
Kael Tripton Ltd is registered with the Information Commissioner's Office under registration number ZC135439.
