Should we spread our money across multiple banks if Santander goes bust?

12 November 2013


My brother and I have lasting power of attorney over our mother's finances. She has all of her money invested with Santander, well over the £85,000 limit for protection under the Financial Services Compensation Scheme. Should we keep the money in one bank - putting it at risk in the unlikely event of Santander going out of business - or spread it across several banks?


The Financial Services Compensation Scheme (FSCS) protects individual savers up to £85,000 for each savings institution. It therefore makes good sense to divide money on deposit between several accounts with different organisations, keeping each account below this limit.

Crucially, however, the compensation limit is per person, per authorised institution. Therefore you need to be careful that you do not hold more than one account under the same banking brand. It is not always obvious which organisations are linked via the same parent company, but you can check out a list at the Financial Conduct Authority's website at

Certain savings institutions are not covered by the FSCS. Again, there is a list available at

If you have a large amount of savings it may not be practical to hold many different accounts, so it's worth considering National Savings & Investments (NS&I), which is backed by HM Treasury so is very safe. Sometimes securing capital is more important than the interest rate gained.

Find the best cash Isa or savings account for you