Fearne Cotton launches consumer awareness campaign
Radio and TV presenter Fearne Cotton is fronting a new consumer awareness campaign launched by the Financial Services Compensation Scheme (FSCS) to educate people that their money is protected should a bank or building society fail.
The FSCS is backed by the government and protects people's savings up to £85,000 per institution, in the event of a bank, building society or credit union going bust.
However, savings aren't protected if you have more than £85,000 in an account or more than £170,000 in a joint account; nor if you have more than £85,000 split across banks, building societies and credit unions which share a banking authorisation (ie, are part of the same group).
The new campaign aims to educate people about these points and will feature five well-known people – including Fearne Cotton – talking about a time in their lives when their money and savings were crucial to securing their future.
Mark Neale, chief executive of FSCS, said: "We know from our research that consumers who are aware of FSCS are more confident and likely to buy financial products. The 'Protecting Your Future' campaign intends to deepen engagement with the public to build awareness of FSCS.
"We know that many of those consumers are not interested in financial or savings issues, so we believe that anchoring stories from a well-known personality's perspective will not only draw consumers into the conversation, but leave a positive level of awareness that will last far longer than the campaign itself."
The FSCS will not reveal who else is fronting its campaign until October, but hopes the recognisable faces will appeal to the half of 25-54-year-olds who are not interested in finance or savings issues.
FSCS research shows that this group of people do not feel they have significant savings (over 40% have less than £5,000 savings), they know very little about finance and nearly half are worried their financial situation will get worse.
"They are concerned about saving for everyday necessities (e.g. bills and food) as well as pleasures (family days out and meals out) in the short-term, and are also focused on bigger treats such as holiday and travel," the FSCS added in a statement.
The campaign launches today and has been paid for by banks, building societies and credit unions.
The Financial Services Compensation Scheme is the compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading, the FSCS may be able to pay compensation to its customers. Limits apply to how much compensation the FSCS is able to pay, and those limits vary between different types of financial products. However, to qualify for compensation, the firm you were dealing with must be authorised by the Financial Services Authority (FSA).
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.