Are UK Investing Apps Safe? FSCS Protection and What Happens If Your Broker Goes Bust (2026)

Short answer: as of October 2026, the big UK investing apps are safe from the risk most people worry about, which is the firm vanishing with your money. They are authorised by the Financial Conduct Authority (FCA, the UK's financial regulator), they must keep your investments and cash apart from their own, and the Financial Services Compensation Scheme (FSCS) pays up to £85,000 per person, per firm if an authorised firm fails and your assets are missing. What none of that does is stop your investments falling in value, or help if you use an unregulated firm.

This guide is for anyone nervous about putting money into an app for the first time. We compiled it from the FSCS, FCA and each provider's own safety pages, all checked in October 2026. We haven't run a failed broker through the process ourselves, so we rely on documented cases and flag anything we couldn't confirm.

If you want the product-by-product picture, read our Trading 212 review, Lightyear review and InvestEngine review, or start with the best investing apps UK guide.

The short version

• Regulation: a safe app is FCA-authorised for the activity it offers. Check the FCA Register, not the app's own marketing.
• Separation: your shares are held in a custody structure separate from the firm's own assets (the FCA's client asset rules, known as CASS).
• Compensation: the FSCS covers up to £85,000 per person, per firm for investments, and up to £120,000 per person, per banking licence for cash deposits (FSCS, October 2026).
• Not covered: falls in the market, bad picks, and anything held with a firm that is not authorised.
• Capital at risk: investments can fall as well as rise, and you may get back less than you put in.

What does "safe" actually mean for an investing app?

Safe means three separate things, and it helps to keep them apart.

1. Is the firm legitimate? That is a regulation question. A firm must be authorised by the FCA to hold client assets.
2. Are my assets protected from the firm's problems? That is a segregation question, answered by the FCA's CASS rules.
3. If something still goes wrong, who pays? That is a compensation question, answered by the FSCS.

Market risk sits outside all three. If the value of your ETF falls 20%, no regulator or scheme will make that good, and no app can promise otherwise.

Layer one: FCA authorisation

The FCA authorises and supervises UK investment firms. To check a firm, search the FCA Register or Firm Checker by name or reference number. As of October 2026, the three apps we recommend show the following:

Authorisation is not a guarantee of good behaviour. Trading 212 was reported in early 2026 to have let UK retail clients trade crypto exchange-traded notes before it held the right permission; we cover that in our Trading 212 review. Regulation lowers risk. It doesn't remove it.

How to check any firm yourself

1. Go to the FCA Register and search the firm's name or reference number.
2. Confirm the status says authorised, and that the permissions include holding or arranging investments.
3. Compare the website address and phone number on the Register with the ones you've been given. Scammers clone real firms' names and details.
4. Treat unsolicited contact, promised returns and pressure to move quickly as red flags.

Layer two: your assets are kept separate

The FCA's Client Assets Sourcebook, known as CASS, requires firms to hold client investments and client money apart from their own. In practice, shares and funds are usually held by a custodian in a nominee structure, so the broker doesn't own them, and client cash is held in separate client money accounts. Firms must reconcile their records regularly and be audited.

Here is what each provider says about its own set-up (October 2026):

• Trading 212 says investments are held with custody partners Interactive Brokers and Bank of New York Mellon in segregated accounts, with daily reconciliation and annual audits. Uninvested cash sits at partner banks including Barclays, NatWest and J.P. Morgan Chase.
• InvestEngine says it never mixes client money with its own and holds client funds in segregated accounts at UK banks and custodians. It doesn't name them on its safety page.
• Lightyear says you are the beneficial owner of your cash and investments, held separately from its own assets. Its GBP cash sits in a mix of UK banks, including Citibank and NatWest, and a qualifying money market fund.

These are the firms' own statements, so treat them as claims backed by regulation and audit rather than as independent proof.

Layer three: the FSCS safety net

The FSCS is the UK's compensation scheme of last resort. For investments, it pays up to £85,000 per eligible person, per firm for firms that failed after 1 April 2019 (FSCS, October 2026). Three conditions apply: the firm must be authorised and regulated for that activity, it must have gone out of business, and there must be a shortfall in the money or assets it held for you.

Two limits catch people out:

• Per firm, not per account. If you hold a Stocks and Shares ISA and a general account at the same broker, they share one £85,000 limit.
• Cash is different. Bank deposits fall under the deposit scheme, which has been £120,000 per person, per banking licence since 1 December 2025 (FSCS). Several brands can share one licence, so spreading cash means using different banking groups.

What the FSCS does not cover

The FSCS states plainly that it does not cover poor investment performance. It also won't help if you were dealing with a firm that was never authorised, or with a product that isn't FSCS-protected. Money market funds are not bank deposits, so deposit protection doesn't apply to cash held in one. Lightyear notes this for its money market fund option, so read the protection page for any cash feature before you rely on it.

What actually happens if a broker goes bust?

Usually, less drama than the headline suggests, but more waiting than you'd like. Based on the FSCS and the cases below, the normal route runs like this:

1. The firm fails. The FCA may place it into special administration, a process designed to return client assets.
2. Accounts are frozen. You can't trade for a period while the administrators reconcile records.
3. Assets move. Client accounts are generally transferred in bulk to another broker. Your ISA wrapper status is meant to be preserved.
4. A shortfall triggers compensation. If money or assets are missing, the FSCS can pay eligible clients up to £85,000.

Real examples

Beaufort Securities (2018). The firm entered special administration in March 2018, with about 17,000 retail and 500 corporate clients affected through its clearing arm, according to the FSCS. The administrators warned that returning around £550m of client cash and assets could take years, and MoneyWeek reported that administrators can recover costs from client money. The FSCS later agreed to meet the shortfall in the administrators' costs for eligible clients, so those costs did not come out of their assets. That case was under the earlier £50,000 limit, which has since risen to £85,000.

SVS Securities (2019). SVS entered special administration on 5 August 2019 after FCA supervisory action. The FCA says most customers' assets have since been transferred to ITI Capital under the administrators' distribution plan, and the FSCS said it would cover eligible shortfalls in client money and custody assets, including the costs of returning them, up to £85,000 per client.

Reyker Securities (2019). Reyker entered special administration on 8 October 2019. The High Court approved its distribution plan on 16 October 2020, a year later, and around 11,500 clients' assets were then moved to new brokers. The FSCS paid the special administration costs for eligible individual clients up to £85,000 each, so the vast majority could transfer without a deduction (FCA and FSCS, checked 16 October 2026).

The lesson is balanced. Client assets were largely returned, but it took months, trading was frozen in the meantime, and some clients with larger portfolios faced costs or delays. If you hold well over £85,000 with one firm, spreading it across two brokers is a reasonable precaution to research.

Practical ways to lower your risk

• Check the Register first. Don't rely on a logo or an influencer's word.
• Stay within the limits. Keep investments at one firm under £85,000, or split across firms. Keep bank cash under £120,000 per banking licence.
• Know where your cash sits. Check whether uninvested cash is in bank accounts or a money market fund, because the protection differs.
• Protect your login. Use a strong, unique password and two-factor authentication. The FSCS doesn't cover you for a hacked account that you didn't secure, and recovery can be slow.
• Mind the transfer-out process. Safety includes being able to leave. Read reviews of transfer times before you commit a large ISA. Our ISA transfer guide explains how to do it properly.
• Diversify inside your portfolio. Safety of the platform is separate from safety of what you buy. A global ETF spreads company risk, as our best ETF for beginners guide explains.

Which app, if safety is your priority?

On regulation, segregation and FSCS cover, Trading 212, InvestEngine and Lightyear sit in the same tier, because all three are FCA-authorised UK entities with the same statutory protections. The differences are in other places. Our InvestEngine vs Trading 212 and Trading 212 vs Lightyear comparisons cover fees and features.

FAQ

Are UK investing apps safe in 2026? The regulated ones are safe in a specific sense. Trading 212 UK Ltd (FCA reference 609146), InvestEngine (UK) Limited (801128) and Lightyear U.K. Ltd (987226) are FCA-authorised and must keep client assets separate from their own. If a firm fails and assets are missing, the FSCS can pay up to £85,000 per person, per firm (FSCS, October 2026). None of this protects you from investments falling in value.

What is the FSCS limit for investments in 2026? £85,000 per eligible person, per firm, for firms that failed after 1 April 2019 (FSCS, October 2026). Bank deposits are covered separately, up to £120,000 per person per banking licence since 1 December 2025.

What happens to my shares if my investing app goes bust? Normally your investments are held separately from the firm's own assets, so its creditors can't claim them. The FCA can put the firm into special administration, accounts are frozen for a period, and client accounts are usually transferred to another broker. If assets are missing, the FSCS can compensate eligible clients up to £85,000. Past cases show it can take months.

Does the FSCS cover me if my investments lose value? No. The FSCS says it does not cover poor investment performance (October 2026). It only steps in when an authorised firm has failed and there is a shortfall in the money or assets it held for you.

How do I check an investing app is FCA-authorised? Search the firm's name or reference number on the FCA Register and confirm its status is authorised, with permission for the activity you want. Check that the website and phone number you use match the Register, because scammers copy real firms' details.

Is cash in my investing app covered by the FSCS? It depends where the cash sits. Cash at UK partner banks falls under the £120,000 per person, per banking licence deposit limit. Cash in a money market fund is held as fund units, not a deposit, so deposit protection does not apply (Lightyear, October 2026).

This is general information, not financial advice. Protection limits, firm details and rules are current as of 13 October 2026 and can change, so confirm them on the FSCS, FCA Register and each provider's own site. Investing puts your capital at risk: you may get back less than you put in. Do your own research and consider speaking to a qualified adviser about your situation.

Last updated: 13 October 2026.