9 July 2015 – The Financial Services Compensation Scheme (FSCS) has announced that the amount of money covered by their bank deposit protection will be reduced next year.
The FSCS, which is run under a European directive, guarantees that deposits in a bank account will be refunded to customers if their bank, building society or credit union collapses.
The amount of money covered by this guarantee for UK savers will be reduced from £85,000 to £75,000 on 1st January 2016.
Why is this?
The Prudential Regulation Authority is required by the European Deposit Guarantee Schemes Directive to recalculate the FSCS deposit protection limit every five years, setting it to the equivalent of €100,000.
When the five-year review took place on 3rd July 2015, the exchange rate had fallen quite considerably and the new limit was set at £75,000 per institution.
The £50,000 limit for investments remains unchanged.
For more information on the changes, please visit the FSCS website: http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-limit-changes/