Savers get extra £10,000 FSCS protection

30 January 2017
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Savers now have £85,000 of their savings guaranteed in the event of a bank failure, thanks to a fall in the value of the pound.

European rules mean that savings worth €100,000 held at each financial institution must be protected by a national body. In the UK, the Financial Services Compensation Scheme (FSCS) protects the amount savers hold in UK financial institutions.

This FSCS previously guaranteed £75,000 of savings but the decline in the value of the pound against the euro means British savers now have an extra £10,000 protected, in order to stay in line with the European limit.

 

Savers will get the increased protection from today, Monday 30 January.

Only the first £85,000 will be guaranteed at each financial institution so savers with more than this are advised to split their cash across two or more providers.

Joint accounts will have a new limit of £170,000, up from £150,000.

Mark Neale, chief executive of the FSCS, says: “The £85,000 limit protects about 98% of the UK public. More people will have more protection for more of their money.”

 

Moneywise analysis

This change is good news for savers but it’s important to remember that if banks share a licence you will still only receive £85,000 protection, even if your savings are split across two distinct brands.

For example, HSBC and First Direct share a banking licence, as do Clydesdale Bank and Yorkshire Bank. If you held £50,000 in HSBC and £50,000 in First Direct, you would only be guaranteed £85,000 in the event of a bank collapse.

Make sure you have no more than £85,000 at each financial institution to ensure you’re fully covered.

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