Bank Protection Charges

There has been a recent change to the rules that protect money that is held in banks. Any banks that are authorised by the FSA are now covered by the Financial Services Compensation Scheme (FSCS).

The FSCS will pay compensation to depositors if a bank, building society or credit union becomes insolvent and can no longer pay its customers. The majority of depositors, including most individuals and small businesses, are covered by the scheme.

An eligible depositor is now entitled to claim back 100% of their deposit up to a maximum of £85,000. For joint accounts held by two eligible depositors, the maximum amount that can be claimed would be up to £85,000 each (ie: a total of up to £170,000). These limits relate to the combined amount in all of an eligible depositor’s accounts with a single bank, building society or credit union; including their share of any joint accounts.

Accounts with other banks, building societies or credit unions will have a separate £85,000 cap.

However some groups that share a FSCS policy will have the single cap. You should check who your building society/bank’s ultimate holding company is because if they are under the same ownership you may only receive one lot of compensation even where you have separate accounts with what appears to be different institutions.

Find out more at the FSCS website here: http://www.fscs.org.uk/