To apply for a Schengen visa I am required to book and pay for my travel. What happens if my application is refused and I lose the cost of my trip?
If you meet all of the visa requirements (including pre-paid travel and accommodation) then you will get the visa every time. Applications are not just refused without reason, an explanation is given by the embassy when they do refuse applications. In most cases it is just a matter of re-submitting the passport with some additional information. Before booking and paying for travel ensure you have enough time to get the visa, that your UK visa has sufficient validity, and that your passport is in good condition and valid for at least 6 months.