Savers in Cyprus got hit with heavy losses of monies they never expected to lose. This had many UK savers wondering if they were next on the losing streak, but there’s good news — for the time being, deposit insurance will cover UK consumers just fine. Yet what about the millions of investors in the UK that are wondering about their investments. If you own shares, bonds, unit trusts or other assets, you want to make sure that you don’t have a “Cyprus moment” of your very own.

The thing to remember here is that investments are going to be a bit different than just money in the bank. Most people realize that banks aren’t just letting all of that money set there. They’re going to be using that money to lend out to customers. The bank makes a critical mistake? They aren’t going to have the money to repay all of the customers, which leads to customers having to seek relief from Government Schemes.

What’s great about investments is that you have an asset that’s yours and yours alone. You don’t lose ownership of the asset merely because the fund managers failed you. Of course, it is possible to still lose money. This is where the Financial Services Compensation Scheme kicks in. If you’re looking to figure out how you’re actually protected, this is definitely the guide for you.

When it comes to shares, you have plenty of options. There’s going to be the use of an intermediary like a stockbroker, who will ensure that your accounts at the company are safe. These companies carry insurance to prevent losses, but you will still want to make sure that you’re investing with a company that you can trust.

Funds are a bit different, as they have a management company behind them. The company doesn’t have direct access to the money, choosing instead to just watch over how the money is invested and processed from quarter to quarter or even more periodic than that.

FSCS protection covers you up to 85,000 GBP on fund supermarkets, which allow you to get many different investments all at once. Some management platforms, such as through Hargreaves Lansdown, actually divide the money between five different banks to raise the number to 425,000 GBP instead of the mere 85,000. As always, you want to make sure that you are checking into the banks used with every product that you select.

What about those catchy “with profits” annuities? You will need to go with a company by company basis. If you have a product that’s “unit linked”, you’ll have the protection you’re seeing. However, if you go with a company’s traditional fund, you might be exposed to losses without realizing it.

Pensions will be a bit different — the FSCS covers you up to 90% of your annuity’s value if the provider goes bust and they can’t handle your payments anymore. However, you need to keep in mind that the bigger attempt would be to move you over to a new company rather than just automatically paying you out.

We hope that this helps you understand what’s protected, what isn’t, and how you can better prepare for any financial bumps along the line. Good luck!