Will the FSCS cover more than £75,000 if it's due to a personal injuries claim?

26 May 2016


My bank accounts hold more than the £75,000 covered by the Financial Services Compensation Scheme (FSCS) because they include compensation received following the death of my husband due to medical negligence.

I have read that compensation for personal injuries is protected for any amount. Does my compensation come under this umbrella and would any other money in my accounts be offset against it should the worst happen? 



You are partly correct. There is a special arrangement for what are called “Temporary High Balances”. These are high sums of money arising from specified major life events that may be deposited and held in a single account. Personal injury compensation is one such event.

The FSCS provides up to £1 million protection for these temporary high balances if the bank or building society fails – except personal injury compensation, for which there is no upper limit.

Also, you still have your usual FSCS limit of £75,000 for yourself as well – it is not offset against the temporary high balance.

However, the extra protection is only provided for up to six months. Before the end of that period you may wish to make longer-term plans for the money, either splitting it between different banks or perhaps investing it in the stock market, depending on your risk profile and future needs.

Moneywise comment: How the FSCS works

The Financial Services Compensation Scheme (FSCS) is designed to protect your money in the event that your bank or building society collapses. If your bank is regulated by the Financial Conduct Authority, you will get up to £75,000 of your savings back from the FSCS.

The FSCS limit applies to all your accounts with that banking institution. So if you have £50,000 in one account and £100,000 in another you would only get £75,000 back.

The limit also applies per banking institution, not per bank. This means if you have accounts with two banks that are owned by the same parent company you would be limited to £75,000 across both accounts.This affects banks such as Halifax and Bank of Scotland, which are both owned by the same company, Lloyds Banking Group.

If your money is in a joint account, the FSCS limit applies to each person – giving you total protection of £150,000.

You can check whether all your savings are covered by using the FSCS’s protection checker at Protected.fscs.org.uk.