The Financial Services Compensation Scheme (FSCS) is a UK government-backed scheme designed to protect consumers when financial firms fail. It provides compensation to customers of banks, building societies, insurance companies, and investment firms that go bankrupt or are unable to pay claims. The scheme covers various types of financial products, ensuring that individuals can recover some of their lost funds. The FSCS is funded by levies on the financial services industry, meaning that the costs are shared among firms. Compensation limits vary depending on the type of product, with the aim of providing a safety net for consumers and maintaining trust in the financial system.