RateSetter's FAQ'sand FSCS scheme regarding Barclays

As I understand it from RS's FAQ's, any cash you have on deposit -- i.e., in your Holding Account and (probably) unmatched orders -- is held by Barclays and is protected by FSCS.  As I said, I'm not sure how this works in practice because obviously RS pool all of our cash into one Barclays account rather than have a separate Barclays account for each user.  But the FAQ implies that the FSCS protection would nevertheless work.

So: if Barclays collaped, the contents of your Holding Account should be repaid (up to £85K).

This is as far as FSCS protection can stretch.  All other balances -- i.e., money on loan -- are not protected in any way.

If RS wound down in an orderly way, you should still be able to withdraw from your Holding Account.  There would be changes in the operation of your account, for instance I'm sure there would be no more RYI-ing and you'd be locked into your loans for their full term.  Also, expect some fees to be charged during the wind-down (RS have recently notified about this, and stipulated a maximum fee level which was not too bad).

If RS collapsed in a disorderly way, insolvent, then administrators would take over.  Again, you should be able to access your Holding Account money provided it has been deposited as stated in a client money account.  Similar to an orderly wind-down, you would probably have to sit out your full loan terms.  Rather differently, though, the administrators will be managing the loans and charging a fortune.